President Biden’s “Build Bank Better Plan” for infrastructure has morphed into “The American Jobs Plan,” a fact sheet for which was released on March 31, 2021.
Many of the details of The American Jobs Plan remain to be developed, including funding mechanisms and the role of the private sector. The Plan contains a section entitled “The Made in America Tax Plan” that provides an outline as to how the Plan is proposed to be financed, including (i) increasing the corporate tax rate from 21% to 28%, (ii) modifying the global minimum tax for U.S. multinational corporations, (iii) strengthening provisions making it more difficult for corporations to avoid U.S. taxes by claiming to be a foreign company, (iv) modifying provisions that allow expense deductions from off-shoring jobs and that provide incentives for shifting assets abroad, (v) enacting a minimum tax on the book income of large corporations, (vi) eliminating special preferences for the fossil fuel industry and restoring payments to the Superfund Trust Fund, and (vii) enhancing Internal Revenue Service enforcement. Although not mentioned, but expected by some sources, changes also include an increase in capital gains taxes for affluent Americans and the re-imposition of the individual tax rate of 39.6% for individuals earning more than $400,000 per year.
Battle lines are already forming and the enactment of legislation creating and funding The American Jobs Plan is far from certain. Key elements of the Plan are outlined below.