Dear Mr. Hamster:
Thank you for contacting me about infrastructure investment. I always appreciate hearing from Arizonans about issues facing our state and country. It is important that we have conversations about topics that matter to you and your family, and I hope you will continue to reach out to me and share your perspectives and suggestions.
America’s schools, roads, bridges, water facilities, broadband, and energy systems are all examples of our nation’s infrastructure. Due to age, postponed maintenance, changes in demand, and rapidly changing technology, infrastructure throughout Arizona and across the country needs repair, renovation, and expansion. In 2020, the American Society of Civil Engineers found traffic delays caused by inadequate infrastructure cost our economy over $170 billion. As of 2018 in Arizona, 43 percent of roads were in poor or mediocre condition and 40 percent of urban highways experienced congestion. Poorly maintained roads cost Arizona drivers $3 billion per year in extra vehicle costs, which amounts to around $575 per driver, and the Arizona Department of Transportation has identified nearly 1,800 bridges across the state that require repairs.
President Joe Biden proposed the $2.25 trillion American Jobs Plan (AJP) on March 31, 2021 to address the nation’s infrastructure needs. The plan focuses on four categories of infrastructure: transportation, infrastructure to support residential areas, workforce development, and caregiving needs.
The AJP calls for approximately $621 billion for transportation infrastructure, including $115 billion to repair highways and bridges, which will fund reconstruction projects for 10 major and 10,000 smaller bridges across the country, $85 billion for public transit, $80 billion for passenger and freight rail, and $174 billion to promote the development and use of electric vehicles. The plan also includes funding for airports, water transit, ports, and infrastructure resiliency. For infrastructure related to the home, the plan allocates $650 billion, including $111 billion for clean drinking water, $100 billion for broadband deployment, $100 for billion electrical infrastructure, $213 billion for housing, and $137 billion for early learning centers, schools, and community colleges. The AJP devotes $580 billion to research and development, workforce development, and manufacturing, and $400 billion for home and community-based care for elderly and disabled people.
To pay for these investments, the American Jobs Plan would enact several changes to the U.S. tax code. The plan would increase the corporate tax rate to 28 percent from 21 percent, partially reversing the reduction from 35 percent signed into law in 2017. Companies would also have to pay an increased minimum tax of at least 15 percent on the net profits reported to investors if they otherwise paid little to no income tax due to legal tax breaks. The 15 percent minimum tax would only be imposed on companies with annual incomes of $2 billion or more, which the Treasury Department estimates would affect an estimated 45 companies in the United States. Other tax changes in the proposal intend to discourage companies from offshoring their headquarters, jobs, or facilities solely for tax advantages. In a separate plan, the president proposed increasing the marginal tax rate to 39.6 percent from the current rate of 37 percent for individuals making more than $452,700 a year and married couples earning over $509,300 a year.
Supporters of the American Jobs Planbelieve the plan makes critical investments in current and future infrastructure needs and will make the United States more efficient and globally competitive. Critics of the plan argue the significant spending will be wasted on projects unrelated to infrastructure that will not encourageeconomic recovery or spur growth and may cause dangerous inflation, and that it contains social policies that will make the United States less competitive. Opponents also state that increasing taxes will hurt American workers and hinder economic growth and competitiveness, especially as businesses recover from the COVID-19 pandemic. While the president’s proposal can be helpful in conveying his priorities, it is not a binding document or legislation, and it is Congress’s constitutional authority to allocate funding. Legislation similar to the American Jobs Plan has not been introduced in the United States Senate.
Given high unemployment levels across the country, low interest rates, and clear need, now is a compelling time to sustainably invest in infrastructure that makes our state and country globally competitive. Investing in our nation’s infrastructure, including broadband access and water infrastructure, two areas of critical importance for Arizona, can immediately put people back to work, relieve the burden on state unemployment systems, and prepare our communities for future crises, including pandemics. I also believe we must modernize and simplify our tax code to reward innovation and encourage global companies to bring their business here. I am working with the administration, with Arizonans, and with my colleagues on both sides of the aisle to developbipartisan infrastructure legislation that sustainably and responsibly addresses our state’s needs, promotes health and safety, and creates more opportunities for Arizonans to get ahead.
Thank you for sharing your view on this issue with me. Please do not hesitate to contact our office with any future questions or comments. Additionally, if you would like to stay connected to our office with the latest news, legislation, and other useful information, please visit our website, sinema.senate.gov.
Sincerely,
Kyrsten Sinema
United States Senator