United States: the 100 days of Joe Biden, the president who wants to tax the rich

Joe Biden does not give his daily analyzes of the crisis his country is going through, but he was quick to initiate deep economic and social reforms that go against the choices of his predecessor.

Brendan Smialowski AFP

Text by: Agnieszka Kumor

6 mins

As Joe Biden struggles to convince Americans that his infrastructure plan goes beyond just renovating roads, and that taxing the richest in order to invest in education would benefit the economy, what assessment to draw from the first 100 days of his mandate?

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The exact opposite of Donald Trump.

Joe Biden does not give his daily analyzes of the crisis his country is going through, but he was quick to initiate deep economic and social reforms that go against the choices of his predecessor.

With some success already achieved.

Job creation

210 million doses of vaccine administered in a hundred days, the American efficiency in this area has enough to make the other great powers dream.

And in fact, all sectors of the economy are benefiting, the restart of activity is real.

Joe Biden, man in a hurry, also launched in record time a massive $ 1.9 trillion plan.

A plan adopted without the support of the Republicans, it aims to offset the impact of the crisis.

Result: nearly 1.3 million jobs created in February and March, and unemployment which fell to 6%.

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Added to this is the $ 2 trillion plan for infrastructure (very aging in the United States) and employment, a plan that the Biden administration intends to finance by raising taxes on American corporations.

This measure is at the heart of a vast tax reform led by the Democratic tenant of the White House.

The maximum tax rate in the United States could thus drop from 37% to 39.6%, in reverse of the measures adopted during the mandate of Donald Trump.

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Effects on Debt and Inflation

Some compare Joe Biden's economic policy to Franklin Delano Roosevelt's New Deal. This comparison is fair, but it has its limits, believes Sylvie Mattely, deputy director of the Institute of International and Strategic Relations (

IRIS

) and specialist in the United States:

“The New Deal intervened in an American economy ravaged by the terrible crisis of 1929. Of course, the Covid-19 crisis had a very strong impact on activity in the United States, but the economy was very resilient, and it is leaving. What is comparable on these two plans is that the American economy finds itself as in Roosevelt's time at the time of transition. This is obviously the energy transition, but also the digital revolution. And it is very likely that we need the State and public investments to pass this course ”.

Joe Biden thinks that it is by supporting families and an extremely proactive social policy that the United States will manage to overcome this milestone and look to the future. But this path is still strewn with obstacles. The majority that the president has in each of the two chambers is very narrow and that complicates matters. So, for example, Joe Biden failed to push the minimum wage hike to $ 15 in his sweeping stimulus package. Some observers are also wondering about the effects of these stimulus and economic support plans on US public debt and on the rise in inflation, which could rise to 3% or even more.

"Rising inflation is a risk",

says Sylvie Matelly.

The key is to know which level will be accepted and for how long.

The Federal Reserve seems to accept a transitional increase above 2%, but in the short term.

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There is also another aspect.

“Joe Biden's plan reposition the state at the center of economic action.

This question is the subject of debate among economists: is public action effective in reviving the economy?

Or is it better to focus on competition?

"

An old debate economist IRIS is also opened:

"

 S

i that return the state should be long-term harm to the US economy, there will be a flashback.

"

Global growth engine

What is certain is that the stimulus plan of the American presidency will have positive effects on world growth.

Sylvie Matelly recalls:

“The American market is a consumer market.

Unlike China where consumption remains limited.

The Chinese economy is essentially based on exports.

As the world's largest market and economy, the United States remains the engine of our planet's growth.

For this reason, the American economy is in fact in deficit, because the United States imports enormously from all over the world.

"

A certain idea of ​​tax justice

There remains another project, very popular with American public opinion. This is the

“family plan”

 : investing $ 1,800 billion in children's services and education, by taxing the fortunate. This project could involve 1 trillion in investments and 800 billion in tax cuts for the middle class. This American middle class is at the heart of the concern of the Biden administration.

Experts are unanimous: the contemporary economic system leaves a growing part of the middle and popular classes by the side of the road. And at the same time, 

“we lived through periods when the better off, the richest were those who paid less taxes. The most prosperous, the most internationalized companies prospered thanks to infrastructures, thanks to the dynamism of the economy, and thanks to public policies, but basically they did not participate in national solidarity. And that was deeply shocking, ”

said the deputy director of the Institute for International and Strategic Relations.

After years of an accelerated race for tax optimization, putting the richest for the benefit of the real economy, as Joe Biden is about to do, sounds like a revolution.

But also as a certain idea of ​​tax justice which could be emulated elsewhere in the world.

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