'US corporations and wealthy must pay a fair share'

US President Biden says "trickle-down economics has never worked – it's time to grow the economy from the bottom up and middle-out"; proposes American Families Plan to pour $1.8 trillion into early education, childcare and colleges; but like his infrastructure bill, it may struggle to pass the Senate intact

by Jim Pollard and Chris Stein
US corporations and wealthy 'must pay a fair share'
Biden addresses Congress on April 28, 2021, flanked by Vice-President Kamala Harris, left, and the Democrat Party's Congress leader Nancy Pelosi, right. Photo Jim Watson/ AFP.

(ATF) US President Joe Biden called on Wednesday for higher taxes on corporations and wealthy Americans – to pay for large spending proposals aimed at improving infrastructure and boosting living standards for poor and middle-class Americans.

"How do we pay for my jobs and family plan? I made it clear we can do it without increasing the deficit," Biden told a joint session of Congress. "I will not impose any tax increase on people making less than $400,000. But it's time for corporate America and the wealthiest 1% of Americans to begin to pay their fair share."

Biden has overseen a highly successful vaccine rollout – 142.7 million people have received at least one dose of a Covid-19 vaccine, while about 98 million people have been fully vaccinated by Johnson & Johnson’s single-dose vaccine or the two-dose series made by Pfizer-BioNTech and Moderna, according to the New York Times, which said on Wednesday that providers are administering about 2.67 million doses per day on average.

The new president has also made two proposals to revamp the US economy after the Covid-inspired downturn in 2020. His latest move is the $1.8 trillion American Families Plan, unveiled earlier on Wednesday, which would pour money into early education, childcare and colleges and universities.

The president also proposed a more than $2-trillion infrastructure plan that would pay for renovating roads and bridges while also funding green technology, expanding broadband internet access and fixing household water supplies.

But unlike the $1.9-trillion pandemic rescue measure he signed in March, Biden is under pressure to find ways to pay for his latest proposals, as 'conservative' Democrat Senator Joe Manchin has suggested he may not support all components of the 'infrastructure bill'.

In Biden's speech to Congress, he called for higher taxes on the rich and aimed his rhetoric at the middle class.

"I know some of you at home are wondering whether these jobs are for you. So many of the folks I grew up with feel left behind, forgotten in an economy that's rapidly changing," Biden said.

'Trickle-down economics has never worked'

"My fellow Americans, trickle-down economics has never worked. It's time to grow the economy from the bottom up and middle-out."

Biden has rejected policies by his predecessor Donald Trump, and says he intends to dismantle the raft of tax cuts Trump enacted in 2017.

Reversing those cuts, ending corporate tax breaks and closing loopholes benefiting large businesses would pay for the American Families Plan, while a hike in the corporate tax rate from 21% to 28% would fund the infrastructure proposal.

"A lot of companies also evade taxes through tax havens in Switzerland and Bermuda and the Cayman Islands, and they benefit from tax loopholes and deductions for offshoring jobs and shifting profits overseas. It's not right," Biden said.

The president also decried the high prices of prescription drugs in the United States, saying he would work with Congress to lower their costs, a goal long sought by American presidents.

"We all know how outrageously expensive drugs are in America. In fact, we pay the highest prescription drug prices in the world right here in America, nearly three times... as much as other countries. We can change that," he said.

The twin spending bills face lengthy paths to approval in Congress, where Biden's Democrats control both the House of Representatives and Senate but only by the barest of margins.

The party used a tactic called reconciliation to overcome a Republican filibuster threat and last month passed with only Democratic votes the $1.9 trillion American Rescue Plan, which was aimed at helping the economy bounce back after the pandemic caused widespread business closures and tens of millions of layoffs.

No significant Republican support has emerged for the latest bills aimed and infrastructure and families, and it's unclear whether or not Democrats will again attempt to pass them without opposition votes.

'Not seeking conflict with China, Russia'

Meanwhile, Biden said Wednesday he was not seeking conflict with China or Russia, as he put a renewed focus on diplomacy in his first address to Congress.

His speech was focused on selling major investments at home, but Biden told lawmakers - who months earlier had dodged a deadly insurrection at the Capitol - that they needed to show democracy can work.

"We're in a competition with China and other countries to win the 21st century," he said, warning: "Autocrats think democracies can't compete."

Biden said he told President Xi Jinping in a two-hour first phone conversation after taking office: "We welcome the competition - and that we are not looking for conflict.

"But I made absolutely clear that we will defend America's interests across the board. America will stand up to unfair trade practices that undercut American workers and industries, like subsidies for state-owned enterprises and the theft of American technologies and intellectual property," he said. 

"I also told President Xi that we will maintain a strong military presence in the Indo-Pacific, just as we do with NATO in Europe -- not to start a conflict but to prevent one," Biden said to applause from an unusually small audience due to Covid restrictions.

In an aside that was not in prepared remarks, Biden noted his extensive dealings with Xi when both were vice presidents -- and warned that China's most powerful leader in years had firm plans for the future.

"He's deadly earnest on becoming the most significant, consequential nation in the world," Biden said.

Focus on cooperation

Overall, the speech marked a shift from the hawkish nationalism of his predecessor Donald Trump, with Biden repeatedly speaking of global cooperation.

Similar to his message on China, Biden said he did not seek worse relations with Russia. In his first three months in office, Biden has imposed sanctions over Russia's purported poisoning of ailing dissident Alexei Navalny and over its alleged interference in US elections and hacking operations. 

But Biden has also proposed a summit in a third country with President Vladimir Putin to bring stability to relations and pointed in his speech to cooperation on climate change and the extension of New START, the last Cold war nuclear reduction treaty.

"I made very clear to Putin that we are not going to seek escalation but their actions will have consequences," Biden said.

With reporting by AFP

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United States joe Biden Congress speech American Families Plan China Russia trickle-down economics Joe Manchin Corporate tax rise