Biden Administration to Invest 2,500 Trillion Won in Infrastructure... Corporate Tax Rate Raised from 21% to 28%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] The Biden administration in the United States is expected to announce a $2.25 trillion (approximately 2,548 trillion KRW) infrastructure investment plan on the 31st (local time), according to reports by The Washington Post (WP) and others.

Following the $1.9 trillion (approximately 2,150 trillion KRW) COVID-19 relief bill signed by President Biden in mid-month, the 'mammoth' infrastructure investment plan to be announced on this day is drawing attention as the 'cornerstone' of the Biden administration's economic policy, WP reported.

The infrastructure investment plan is said to allocate about $650 billion for rebuilding highways, bridges, and ports; about $400 billion for elderly and disabled care facilities; $300 billion for new housing construction; and $300 billion for manufacturing revival.

Billions of dollars will also be spent on strengthening the national power grid, building ultra-high-speed data communication networks, and improving water supply systems for clean drinking water. In particular, about $400 billion is expected to be invested in clean energy-related projects.

WP cited sources saying, "White House officials are making final adjustments to this infrastructure investment plan," adding, "Some details may be adjusted in the final announcement."

The Biden administration plans to pursue tax increases to finance this large-scale infrastructure investment. ABC News stated, "President Biden is expected to propose multi-trillion-dollar tax hikes along with the infrastructure investment plan," noting, "The tax increases will likely focus on corporations and high-income earners, including corporate taxes that were cut during the Donald Trump administration."

Internet media Axios reported that President Biden is considering raising the corporate tax rate from 21% to 28%, and increasing the income tax rate for high-income earners making over $400,000 (approximately 450 million KRW) annually from 37% to 39.6%.

AFP also reported, citing senior government officials, that plans are underway to raise the corporate tax rate to a maximum of 28%. An official explained, "President Biden proposes reforming corporate tax regulations to encourage job creation and investment, and to ensure large corporations pay their fair share."

Senate officials familiar with the infrastructure investment plan told WP that "the infrastructure investment spending will be offset over the next 15 years through tax increases."

White House Press Secretary Jen Psaki has stated that the government plans to announce two infrastructure legislative packages within weeks. Following the infrastructure investment announcement on the 31st, the second package, expected to be announced by the end of next month, will focus on middle-class protections such as expanding health insurance coverage, extending and expanding child tax credits, and increasing paid family leave, according to officials.

WP projected that including the budget allocated for the second package, the total infrastructure investment budget pursued by the Biden administration could reach $4 trillion (approximately 4,500 trillion KRW).

On the 31st, President Biden is scheduled to visit Pittsburgh, Pennsylvania, where he will deliver a speech on rebuilding America through bold infrastructure investment and unveil the final blueprint of the infrastructure investment package.

This content was produced with the assistance of AI translation services.