To finance his major projects, Joe Biden wants to tax American companies harder

Abraham Lincoln, when President of the United States from 1861 to 1865, created the transcontinental railroad; Dwight Eisenhower (1953-1961) had the American highways built. Joe Biden, for his part, intends to launch an infrastructure program so that we can say later: “This was the moment when America won the future. “ In a speech on Wednesday, March 31 in Pittsburgh (Pennsylvania), the Democrat purposely cited Republican predecessors, to call on Congress to vote his program in a cross-party agreement. It was, in fact, a very political trip to the places where he launched his presidential campaign in 2019, in order to “Give America back its backbone”.

This plan consists of a mixture of expenses and investments, with, on the other hand, an increase in corporate taxation. The press hesitated all day to know which aspect to insist on. The political point is obvious. To put the middle classes back in the game, who have “Build this country”, companies must pay their share, especially those that relocate. We therefore find the workerist speech of Joe Biden and an economic nationalism that Donald Trump would not have denied.

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Worth $ 2,250 billion (€ 1,918 billion), this plan comes after the adoption, in March, of a first “Covid” plan of $ 1,900 billion, but the two are not not comparable. The latter, which consists in particular of writing unrequited checks to Americans, will be consumed in 2021 and exceeds 8% of gross domestic product (GDP), while that presented in Pittsburgh is spread over eight years, or only 1.3%. of GDP per year. It should cause less inflationary risk than the previous one, decried by renowned economists like Democrat Larry Summers.

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The first third of the plan ($ 721 billion) concerns the renovation of traditional infrastructure – bridges, roads, airports, public and urban transport. This sum includes a component devoted to the energy transition, with a massive investment in the electric vehicle (174 billion) and a renovation of the electrical network to the tune of 100 billion, after the gigantic blackout that paralyzed Texas in February.

Limited environmental component

In addition, there are inclusive investments, so that the whole country can benefit from the technological revolution. Mr. Biden wants to spend $ 100 billion on high-speed Internet access. In the United States, rural and poor areas are poorly connected and the cost of subscription in a cartel sector often exceeds $ 100 per month. The plan also provides $ 100 billion for vocational training.

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