US Congress approves Biden's infrastructure plan

The U.S. House of Representatives approved President Joe Biden's $1.2 trillion plan to develop infrastructure and create jobs. In August, the project received approval from the Senate, the upper house of Congress, after infrastructure funding was cut to $550 billion.

228 congressmen opposed the adoption of the document, which is now sent to Biden for signature, and 206 were against. The votes were divided mainly along the party line, but, as Bloomberg notes , the bill was also supported by 13 Republicans, without which it would not have been approved. Among others, 6 Democrats spoke out against the plan.

Biden called the passage of the bill "a grand step forward [for America] as a nation."

The infrastructure bill was originally supposed to go in a package with a $1.75 trillion social assistance and climate change bill. But disagreements arose within the Democratic Party itself. Representatives of the moderate wing were in favor of conducting an audit and making sure that the expenditure of budgetary funds was admissible.

In the spring, Biden also signed a $1.9 trillion stimulus plan. Only he, analysts predicted , can add 1 p.p. world GDP.

The Biden administration planned to pay for all investments related to the infrastructure program for the next 15 years by raising taxes for businesses and wealthy Americans.

• The main change is the corporate income tax, which Donald Trump's 2017 reform reduced to 21%, Biden proposed to increase to 28%. This is still significantly lower than under Barack Obama (then it was 35%), but this rate places the US among the countries with the highest tax burden on businesses among the largest economies in the world, the WSJ noted .
• Also, at the initiative of the United States, will be introduced . a minimum global tax for transnational corporations at the level of 15%
• At the same time, Democratic senators at the end of October proposed to introduce a "tax on billionaires" in the United States. He assumes that the richest people in the country will have to pay 23.8% each year on the increase in the value of traded assets, such as stocks and bonds. Such a tax would partially finance the Biden administration's gigantic social programs, but is unlikely to be passed in its original form, writes Bloomberg. The initiative is extremely tough, given that until now billionaires' US traded assets have only been taxed if they are sold. Now the tax will be annual, and it will have to be paid from the full increment of the market value.

To learn more

The main victims of the Biden administration's gigantic spending could be shareholders of companies for which the result of tax increases will be a decrease in dividends and the price of their shares, the WSJ feared. Nevertheless, Biden still holds the record of recent decades for the growth of the S&P 500 in the first year of his presidency. Since the 2020 election, the index has risen more than in the first year of any other modern president. For example, under Donald Trump in 2016, the S&P 500 rose by 21.3%, under Barack Obama in 2012 - by 24%. Before Biden, the US index reached more than 30% growth only after the re-election of Bill Clinton in 1996 (+32%).