President Biden’s American Jobs Plan, which would finance high-return infrastructure investments partly by undoing some of the dramatic 2017 corporate tax cuts, would make the tax code fairer and raise substantial revenue without undermining economic growth. Our newly updated paper has the details, including analyses from Moody’s Analytics and International Monetary Fund (IMF) researchers with further evidence on the equity and growth benefits of this approach.
The 2017 law slashed the corporate rate from 35 to 21 percent. The Jobs Plan would raise the rate to 28 percent and reduce tax incentives for companies to shift profits and investments overseas.
Critics of progressive tax changes like these often don’t acknowledge the benefits of the investments that the added revenue makes possible. In contrast, a recent analysis by Mark Zandi and Bernard Yaros of Moody’s Analytics estimated the combined effects of the Jobs Plan’s infrastructure investments — in broadband, roads and bridges, and research and development — and its corporate tax increases. Using a model similar to those used by the Congressional Budget Office and Federal Reserve Board, they found that:
Center on Budget and Policy Proposals
by George Fenton
MAY 25, 2021