Joe Biden to announce tax hikes to pay for huge $3 trillion infrastructure plan

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The project revolves around a pledge the Democrat made on the campaign trail to modernise ageing infrastructure - Reuters
The project revolves around a pledge the Democrat made on the campaign trail to modernise ageing infrastructure - Reuters

Joe Biden is expected to announce tax increases targeting the wealthy on Wednesday, when he unveils his ambitious nearly $3trillion (£2.1trn) infrastructure package aimed at keeping the US competitive with China.

The president will announce the first part of his "Build Back Better" programme in the former steel town of Pittsburgh, Pennsylvania, outlining spending proposals forecast over the next 10 years devoted to fixing the country's crumbling roads, transport, sewage systems and other essential works.

Mr Biden’s proposal will reportedly impose a global minimum tax on profits from foreign organisations, increase capital gains taxes for the rich, corporate tax rate to 28 per cent from 21 per cent and see a return to the George W. Bush-era individual rate of 39.6 per cent for those making over $400,000 (£292,000).

The rest of the money could be made up by borrowing.

The project revolves around a pledge the Democrat made on the campaign trail to modernise ageing infrastructure, to meet the challenge of competing against an industrious Beijing, and to tackle the key issue of climate change.

George W Bush throws out the first pitch in front of his father, George H W Bush, at the fouth game of the 2010 MLB World Series - Getty Images
George W Bush throws out the first pitch in front of his father, George H W Bush, at the fouth game of the 2010 MLB World Series - Getty Images

The White House said it will unveil a second plan in several weeks’ time that includes an expansion in health care insurance coverage; expanded child tax benefits; and paid family and medical leave.

The idea of repairing or building roads, bridges, railways, ports and airports is appealing to the general public, especially since much of America's infrastructure dates back to the 1950s and is generally considered to be dilapidated. But building a political consensus on the details could prove difficult.

A number of Republicans have already signalled displeasure at the idea of a tax hike.

Mitch McConnell, Senate Minority Leader, last week signalled opposition, saying: “They’re now cooking up yet another package they’re going to call infrastructure, but it’s going to be a Trojan horse that includes massive tax increases on Americans,” he told Fox News. “They’re going hard left.”

Democratic congressional leaders are preparing to go it alone, much as was done in the record $1.9 trillion Covid-19 aid package.

"If they share a goal of building our infrastructure for the future, but don't like the way he's going to propose to pay for it, we're happy to look at their proposals," Jen Psaki, White House Press Secretary, said. "If they don't want to pay for it, I guess they can propose that, too. Maybe they don't support infrastructure spending."

It came as Mr Biden declined an offer from the Washington Nationals baseball team to throw the ceremonial first pitch on Thursday’s opening day.

The Nationals had invited Mr Biden to take the throw in November, shortly after the election was called in the 78-year-old’s favour.

The tradition of presidents throwing out the first pitch began with President William Howard Taft in 1910. Apart from President Donald Trump, every president has thrown out a first pitch during their term in office while Washington has had a professional baseball team.

Ms Psaki declined to give a reason for the decision.

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