US president Joe Biden on Wednesday called for higher taxes on wealthy Americans and corporations as he sought ways to pay for his spending proposals aimed at improving infrastructure and the workforce.
“How do we pay for my jobs and family plan? I made it clear we can do it without increasing the deficit,” Biden told a joint session of Congress. “I will not impose any tax increase on people making less than $400,000. But it’s time for corporate America and the wealthiest one percent of Americans to begin to pay their fair share.”
Biden has made two proposals to revamp the US economy after the Covid-19 pandemic caused a severe downturn in 2020, the latest of which was the $1.8 trillion American Families Plan unveiled earlier in the day that would pour money into early education, childcare and colleges and universities.
The president has also proposed a more than $2 trillion infrastructure plan that would pay for renovating roads and bridges while also funding green technology, expanding broadband internet access and fixing household water supplies.
But unlike the $1.9 trillion pandemic rescue measure he signed last month, Biden is under pressure to find ways to pay for his latest proposals, and in a speech where he called for higher taxes on the rich, the president aimed his rhetoric at the middle class.
“I know some of you at home are wondering whether these jobs are for you. So many of the folks I grew up with feel left behind, forgotten in an economy that’s rapidly changing,” Biden said.
“My fellow Americans, trickle-down economics has never worked. It’s time to grow the economy from the bottom up and middle-out.”
The tone wasn’t too far removed from that of Republican former president Donald Trump. But Biden, a Democrat, otherwise rejected his predecessor’s policies, saying he intended to dismantle the raft of tax cuts Trump enacted in 2017 -- a signature policy achievement.
Reversing those cuts, ending corporate tax breaks and closing loopholes benefiting large businesses would pay for the American Families Plan, while a hike in the corporate tax rate from 21 per cent to 28 per cent would fund the infrastructure proposal.
“A lot of companies also evade taxes through tax havens in Switzerland and Bermuda and the Cayman Islands, and they benefit from tax loopholes and deductions for offshoring jobs and shifting profits overseas. It’s not right,” Biden said.
The president also decried the high prices of prescription drugs in the United States, saying he would work with Congress to lower their costs, a goal long sought by American presidents.
“We all know how outrageously expensive drugs are in America. In fact, we pay the highest prescription drug prices in the world right here in America, nearly three times... as much as other countries. We can change that,” he said.
The twin spending bills face lengthy paths to approval in Congress, where Biden’s Democrats control both the House of Representatives and Senate but only by the barest of margins.
The party used a tactic called reconciliation to overcome a Republican filibuster threat and last month passed with only Democratic votes the $1.9 trillion American Rescue Plan, which was aimed at helping the economy bounce back after the pandemic caused widespread business closures and tens of millions of layoffs.
No significant Republican support has emerged for the latest bills aimed and infrastructure and families, and it’s unclear whether or not Democrats will again attempt to pass them without opposition votes.