Historically speaking, in times of great economic and societal stress, governments are often able to pass sweeping progressive legislation to revamp the country’s system. In the case of the United States, one can see this effect most prominently in FDR’s presidency, where the Great Depression gave him political power that allowed him to push sweeping change in America’s administration, economy and infrastructure.
One could say that we are in a similar situation. Covid-19 has ravaged our economy, and other crises such gun violence and a weak national infrastructure has given Congress and the President the political power to create impactful change.
So far Biden and Congress have passed economic aid to the American people, and Biden has pushed Congress to create effective gun legislation. Now, he is looking to reinvent America’s infrastructure, starting with a $4 trillion plan, which will also tackle climate efforts.
His administration hopes to build new electric power lines that will deliver more renewable energy and build electric vehicle charging stations. Biden hopes to place caps on carbon emissions. As well, the plan will create energy-efficient housing complexes and renovate existing housing to be more energy efficient. His proposal will also push for a rebate plan on fossil fuel driven vehicles to transition to an electric automobile system. For standard infrastructure works, $600 billion will go towards the construction of roads, bridges and rail stations.
The real question, however, is whether his plan goes far enough and if it is financially plausible. Many lawmakers, such as Alexandria Ocasio Cortez and other progressive democrats, feel that his plan to create climate regulation will not be as effective as pure carbon caps. Republicans view the plan as fiscally irresponsible, primarily due to its funding being based upon tax increases.
Biden intends to raise the tax rate for individuals who earn more than $400,000 from 37% to 39.6%. For corporations, the rate will go from 21% to 28% and a 15% minimum tax on th book income will be imposed. The capital gains rate will also likely increase, as Biden wants to have a nearly 40% top rate compared to the present 20% rate.
Republicans argue that lower taxes had in fact improved wages and the U.S. economy leading up to the Covid-19 pandemic, however, research from the International Monetary Fund has shown otherwise. Senator John Kennedy of Louisiana has also stated that the tax system is based upon class when it should be based upon economics.
While there are many discussions that need to be had, it is clear that America needs change. Thus, Biden and the Democrats must push hard to pass legislation, for if there ever were a time to create change, now would surely be it.