Examining the 2021 Infrastructure Plan: The Pros and Cons
On November 5th, 2021, Congress officially passed the Biden Administrations Infrastructure Investment and Jobs Act. It was formally signed into law on November 15th.
While it was a significant legislative accomplishment for the White House, many Americans wonder what the plan means for their wallet and future. Depending on how you look at the infrastructure strategy, there are several potential pros and cons.
Potential Advantages of the Infrastructure Plan
Without the proposed improvements of the Infrastructure Plan, American families were looking at an estimated expense of $3,300 annually, roughly $63 per week until 2039. However, with the new Infrastructure Plan, those costs are potentially eliminated, meaning families can still count on that disposable income.
Additionally, according to the White House, the $1.2 trillion plan can help ease commute times by reducing traffic. The plan provides a substantial amount to public transportation and electric vehicles, but only time will tell how these investments affect commuting.
One of the most significant components of the plan includes improved access to cheaper and faster internet. The current goal is to offer affordable high-speed service to families and areas that don't currently have it and to provide more affordable options to people who currently have it.
Finally, with all of the upgrades to American infrastructure, you can bet that more jobs are in the pipeline. According to White House predictions, the infrastructure investment will create millions of new and good-paying jobs.
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Potential Disadvantages of the Infrastructure Plan
While no one can deny that U.S. infrastructure was in desperate need of an overhaul, the new plan comes with a hefty price tag and no guarantee of success. There is tremendous promise, but the current plan does increase the national debt by billions with little explanation for how it's covered in the long term.
The plan also calls for a corporate tax hike that could hurt small businesses with fewer than 500 employees. While the Biden Administration claims the plan protects 97% of small business owners, the Tax Foundation suggests that number is a stretch, suggesting it is more likely to protect 75%, leaving 25% vulnerable.
Additionally, corporations bothered by the tax hike could become angry, arguing it is too high. If they are disgruntled enough, corporations could leave, resulting in fewer jobs and potential pay cuts for American workers.
According to information provided by the Ways and Means Committee, the plan could result in higher taxes for lower and middle-income Americans. The committee suggests these increases could occur within the next 10 years.
American portfolios could be at risk, too. If corporations are paying higher taxes, it ultimately affects their bottom line, which could affect individual investors through personal and retirement investment accounts.
Finally, the plan could deplete an already struggling Social Security fund. Financial experts recently suggested the fund would be empty by 2034, but that was before the spending on the new infrastructure deal.
No one can deny the American infrastructure needed an overhaul, but there is some criticism over the amount of money being allocated and how it is being spent. Ultimately, it is up to American citizens to invest and save to protect their future because you cannot look to the government.
How do you feel about the current Infrastructure Plan? Are you concerned or excited about the future? Comment below.