- Phase 1 of Biden’s $2 trillion infrastructure plan expected to roll out in the coming days
- American Families Plan will increase spending by $1 trillion and $500 billion in tax credits
Full details have yet to be released on the latest provision under Biden’s $2 trillion infrastructure plan, but we can expect rollout to begin as early as this week.
The full infrastructure budget has been divided into two parts. The first part, the American Families Plan (AFP), focuses on “human infrastructure” geared towards providing Americans flexibility and opportunity where they need it most.
While Republicans are creating their own infrastructure plan that counters Biden’s at a fraction of the cost, it’s unlikely to make much headway before the AFP kickstarts this week.
AFP Spending Budget:
- $225 billion: Child Care & Paid Family/Medical Leave
- Includes the extension of the expanded child care tax credits through 2025. These credits were first approved in the American Rescue Plan and were set to expire at the end of this year.
- The expanded tax credit offers $3,600 per young child and $3,000 per older child.
- $200 billion: Universal Pre-Kindergarten
- ~100 billion: Education funding, including tuition-free community colleges
- Remainder: Nutritional assistance
Democrats have clarified that they will pursue health coverage as a separate initiative, contrary to previous reports that $700 billion of the AFP budget would fund this effort.
How It’s Being Funded:
- Households making over $400,000 annually will be subject to a new top marginal income tax rate of 39.6%, compared to the current 37% which was established under the TCJA.
- Those earning over $1 million will be subject to a 39.6% tax on capital gains in addition to the current 3.8% surtax to help fund the Affordable Care Act, compared to the current 20% rate.
- Increased enforcement from the IRS to ensure wealthy Americans are paying their share of taxes.
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