First, Do No Harm. Federal Infrastructure Initiatives and Financing
May 14, 2021 | What A Ride
ABI members involved in the policy development process understand that infrastructure is a key policy priority and in fact ABI members outlined infrastructure as a key policy priority for legislative action in Iowa. That focus has led to significant investment in the reach and connectivity speeds of broadband services in Iowa. At the federal level the Biden Administration unveiled a large new infrastructure spending and revenue collection measure on March 31, 2021. The topline stats outline $2.25 trillion in spending in the next eight years financed by $2 trillion in new business taxes over the course of the next 15 years. Addressing infrastructure needs is a non-partisan endeavor and is discussed and pursued regardless of what political party controls the day. While no legislation ultimately passed, a one trillion dollar infrastructure plan was the topic of conversation between the previous administration and the last congress. ABI’s federal partner, the National Association of Manufactures (NAM), has analyzed the newest infrastructure proposal and determined the new taxes on businesses included in the infrastructure plan would cost jobs since those taxes target job creators to finance the new spending included in the plan.
The NAM analysis, conducted by Rice University economists John W. Diamond and George R. Zodrow, determined the measure would cost one million jobs nationwide in the first two years and 600,000 jobs in each year for the next decade. The plan would increase taxes on corporations from current rates of 21 percent to 28 percent. A new 15 percent minimum tax would also be implemented. Taxes would also rise on overseas earnings. In an implicit admission to the non-competitiveness of the proposed tax rates, the U.S. Treasury Department is encouraging foreign governments to mirror the tax hikes in the proposal to preserve U.S. international trade. Portions of the infrastructure plan are commendable, investing in roads, bridges, the electric grid and other shared public works are what infrastructure investments are all about. Some items are unnecessary or simply don’t qualify as a common understanding of infrastructure. ABI encourages a legislative process that narrows the focus to needed and necessary true infrastructure projects. Through public statements, it is clear that all members of the Iowa delegation to Congress understand that Iowa manufacturers and businesses must remain competitive to prosper, employ fellow Iowans and create shared wealth. Your ABI public Policy team will be communicating your interests and working to ensure funding an infrastructure package does not retard economic growth in Iowa. Please reach out to us with any questions as debate on the plan moves forward as we stand ready to assist.
Contact the ABI Public Policy Team:
• JD Davis; Vice President, Public Policy
• Brad Hartkopf; Director, Public Policy