Biden’s Infrastructure Plan Would Be a Drag on Economic Growth: Tax Foundation

The combined tax and spend features of the Biden administration’s proposed infrastructure package—the American Jobs Plan (AJP)—would lead to weaker economic growth and fewer jobs, a tax policy think tank estimates. The Washington-based Tax Foundation, a nonpartisan group that often subjects high tax policies to critical scrutiny, said in a new analysis that the AJP would shave around a 0.5 percentage point off long-run economic growth and result in 101,000 fewer jobs than the current law baseline. The modeling assumes a version of the AJP that would increase federal spending by about $2.2 trillion over 10 years, including $1.7 trillion for infrastructure, partially funded with permanently higher corporate taxes of about $1.7 trillion over the ten-year period. The analysis does not specify the current law baseline for growth and jobs—meaning what level of gross domestic product (GDP) and job growth is projected without the kind of significant changes to the current legal …

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