Every new administration sets key priorities to accomplish within their tenure, from economic policies to social agendas. As 2021 nears the end of its first quarter, resiliency remains the focus of not just businesses planning their comebacks, but of the White House’s approach to the economy as well. But what does that look like, and what does it mean for Michiganders, exactly?
Stimulating Conversations –
AP News reports the U.S. House of Representatives passed a $1.9 trillion virus bill aimed at delivering financial aid to several sectors of the U.S. economy. Among the initiatives included in the bill are $1400 stimulus checks, extended emergency unemployment benefits and money to facilitate the distribution of vaccinations1. According to economists, a robust stimulus package combined with other initiatives from the current administration, including raising taxes for corporations, increasing minimum wage to $15 per hour and mandating paid sick leave will have the greatest impact on Michiganders right now, mLive reports2.
Boosting the Child Tax Credit –
The new bill, which is headed to the U.S. Senate this week for debate and, hopefully, a resolution by March 14, also includes a provision that increases the child tax credit, CNBC reports. The goal is to increase the credit from $2,000 per child under 17 to $3,600 per child under six years old and $3,000 per child over age six. The structure of the credit, as the current administration is cited to prefer, would be to make it fully refundable. This would mean that taxpayers could get a refund even if the credit exceeds their tax liability3.
According to mLive, this is a proposal for which Luck Shaefer, director of poverty solutions at the University of Michigan (UM) and the UM poverty solutions group has been lobbying. Shaefer argues the program should be tweaked to split payments into monthly chunks instead of one annual payment, however. “Expenses don’t just all come at tax time,” Shaefer said. “We want to have benefits for them that can help them buy food and pay for utilities throughout the year2.”
Revisiting the Tax Cuts and Jobs Act of 2017 –
In addition to raising the corporate income tax rate from 21% to 28%, which is still lower than the pre-Tax Cuts and Jobs Act (TCJA) rate of 35%, the new bill aims to increase taxes on foreign earnings. This is another key feature which could have an impact on Michiganders, especially those fearing their manufacturing jobs could be offshored at some point in the near future, mLive reports2.
“The overwhelming majority of its benefits went to very high-income individuals, especially those with large stock market portfolios,” Michigan State University economics professor Charley Ballard said about the 2017 cuts. “Biden proposes to reverse some of that.”
According to The National Law Review, emphasis on American manufacturing has come to fruition under and executive order signed by President Biden on Jan. 25, 2021:
“The Executive Order generally covers all “Made in America Laws,” which it defines as including “all statutes, regulations, rules and Executive Orders relating to Federal financial assistance awards of Federal procurement, including those that refer to ‘Buy America’ or ‘Buy American,’ that require, or provide a preference for, the purchase or acquisition of goods, products, or materials produced in the United States, including iron, steel, and manufactured goods offered in the United States.” The Executive Order also cites the Jones Act, which requires all vessels carrying goods between ports in the US be made in, built in, flagged in, and crewed by those from the US4.”
Other Noteworthy Economic Initiatives –
Several other initiatives listed on the current President’s website particularly relevant to Michiganders include:
- $50 billion in the first year spent to repair the nation’s roads and bridges.
- $20 billion invested in rural broadband infrastructure development.
- Introduce tax credits to renovate homes in distressed areas.
- Financial assistance to state, local and tribal governments (included in the 1.9T stimulus plan currently headed to the U.S. Senate, according to CNBC5).
- Restoring the full electric vehicle tax credit.
- Introduce tuition-free college for eligible families.
- Create mandate for companies to offer 12 weeks of paid family and medical leave and universal paid sick leave.
According to mLive, Bidens plan steers money to low-income families by focusing on unemployment, raising minimum wage and offering more opportunities to people with fewer options. ““We’ve never taken on an approach that was primarily driven by providing cash transfers to families,” Shaefer said. “All the evidence looks to me like it worked and it worked really well. And I think the Biden plan is even more aggressive on that front2.”
References
- Fram, Alan. “Biden Hails House Passage of $1.9T Virus Bill…” AP News. 27 Feb. 2021. Accessed on 1 Mar. 2021.
- DesOrmeau, Taylor. “What could Joe Biden’s Economic Plans Mean for Michiganders?” mLive. 27 Feb. 2021. Accessed on 1 Mar. 2021.
- Iacurci, Greg. “Biden Claims His $1.9 Trillion Covid Relief Plan…” CNBC. 23 Jan. 2021. Accessed on 1 Mar. 2021.
- “US Government Contractors Beware: Evolving Buy American Requirements…” The National Law Review. 3 Feb. 2021. Accessed on 1 Mar. 2021.
- Franck, Thomas & Jacob Pramuk. “House Set to Approve Biden’s $1.9 Trillion Stimulus Package…” CNBC. 26 Feb. 2021. Accessed 1 Mar. 2021.