The saga on the economic agenda of the president of the United States, Joe Biden, reached a new turning point on Thursday. After weeks of negotiations, the White House revised its social and environmental spending plan, reducing its size to $ 1.75 trillion ($ 1.85 trillion if the $ 100 billion earmarked for immigration is included ).
The president slimmed down his proposals, which originally amounted to 3.5 trillion dollars , in the hope of closing the disputes between the Democrats and set foot in Rome this Friday with a roadmap endorsed by his party. At the end of the day, he acknowledged behind closed doors that his presidency will depend on this package coming to fruition . However, as of press time, the support of Democratic senators such as Joe Manchin or Kyrsten Sinema was still up in the air.
The submitted review left out some of the more powerful initiatives Biden promised during his election campaign, such as paid sick leave. Survived, among others, universal access to nurseries and preschool education for children between 3 and 4 years old, whose financing will be extended at least 6 years. Also child care subsidies, limiting what families pay to 7% of their income. The plan offers a one-year extension to the current child tax credit, which currently benefits 35 million households .
A sweetened plan
On the environmental side, tax incentives to encourage the use of clean energy will be extended for a decade, both on the residential side and on public services, including electric cars. The pandemic-related Affordable Care Act (ACA) grants will last for another four years and Medicare public health insurance, primarily targeted at those 65 and older, will cover costs related to the hearing problems .
The package of measures includes a game to improve and reform the “battered immigration system” in accordance with the rules of conciliation of the Senate. If it is approved by both Houses of the Capitol, Biden’s social and climate agenda will be paid for by introducing a minimum tax of 15% on the profits of large companies . It will also adopt the global minimum tax of 15% negotiated by Secretary of the Treasury, Janet Yellen, under the framework of the Organization for Economic Cooperation and Development (OECD) and will apply an additional tax rate of 5% to taxpayers’ income. over 10 million dollars .
This tribute would increase another 3% on income above $ 25 million. Finally, the initiative to impose a capital gains tax of 23.8% on billionaires is not included. Of course, the plan calls for a 1% surcharge on the repurchase of shares by companies, which the Biden Administration considers that managers “use too often to get rich instead of investing in workers and growing their businesses. “.
The Biden administration plans to bolster the IRS with an injection of money to help the tax collector hire more auditors and upgrade its technology. As explained from the White House, the audit rates of those who earn more than a million dollars a year in the United States fell by more than 60% in the last decade .
Democrats cannot lose any Senate seats and can only afford to leave behind three votes from their bench in the House of Representatives, as Republicans oppose funding Biden’s agenda. In addition, lawmakers in the lower house must pass the bipartisan infrastructure bill , which includes an additional spending of $ 550 billion.