Trillion-dollar plans with contrasting approaches.
Roads, bridges, waterways and even internet networks. Although infrastructure may not be at the forefront of our minds, it remains an integral component of our daily lives, particularly during a pandemic. With millions of people working remotely and physically distancing, 17 million infrastructure workers have dedicated themselves to preserving our way of life as much as possible – keeping our power on, ensuring our Wi-Fi is up to speed and delivering our packages. In short, maintaining the underlying systems that sustain our nation.
Recognizing the role safe, secure infrastructure plays in our daily lives, President Donald Trump and Democratic presidential nominee and former Vice President Joe Biden have laid out their plans to restore and improve the country’s framework. But while both hope to build a stronger nation, their proposals stand in stark contrast.
Trump debuted his policy on infrastructure as a presidential candidate in 2016, when he proposed a $1 trillion plan that would use tax incentives to prompt private investment in public works projects. The plan, which hasn’t come to fruition, included an overhaul of roads, bridges and airports to spark economic growth.
In preparation for the 2020 election, Trump outlined a new $1 trillion infrastructure plan. This time, he’s seeking to cover the majority of costs by relying on federal spending. He proposes funding $810 billion of it through a 10-year reauthorization of the Surface Transportation Program, which currently finances a range of infrastructure and expires September 30. He also plans to add $190 billion in one-time grants for a variety of projects, from roads and dams to high-speed internet networks. Other grants would be used to fund freight systems, rural projects, bridges and public transit.
While relatively tax-neutral, the Trump administration’s focus on efficient regulation has helped reduce approval times for various projects, sometimes at the expense of conservation laws.
In July 2020, Biden released a $2 trillion infrastructure plan designed to boost the economy and counter climate change. According to his campaign, the four-year plan would help modernize transportation, including roads, bridges and tunnels, as well as increase broadband access and reduce the country’s carbon footprint.
Biden’s clean energy efforts focus on increasing public transport and electric vehicle incentives to reduce emissions. This includes restoring the full electric vehicle tax credit and adding more than 500,000 public charging stations by the end of 2030. He also seeks to enhance energy efficiency by upgrading four million buildings and weatherizing two million homes. Federally funded projects are other key items in Biden’s agenda.
Biden plans to cover the price tag of his climate-conscious initiatives through his tax plan, which proposes raising the corporate tax rate from 21% to 28%. More notably, he’s seeking to restore the tax rate on earnings of $400,000 or more to 39.6% – the rate in place before the Tax Cuts and Jobs Act of 2017 – and extend the 12.4% Social Security tax to those high earnings.
Trump’s and Biden’s infrastructure plans offer an inside look into their vision for the nation’s framework. Come November, we’ll learn more about which candidate’s plans resonated most with voters.
Sources: Raymond James Equity Research; cisa.gov; cdc.gov; abcnews.go.com; greencarreports.com; brookings.edu
All expressions of opinion reflect the judgment of Raymond James and are subject to change. There is no assurance the forecasts discussed will be realized.