Biden’s Tax Policies Would Hamstring Economic Recovery and Social Mobility

Debate over the Biden administration’s infrastructure bill is heating up. However, much of the discussion centers on how the infrastructure spending will be financed instead of the proposed spending itself. The main issue is how the financing for this plan will position the country as it continues its economic recovery after the pandemic. How could paying for the plan increase or hinder social mobility, and how might the tax proposals position the United States compared to other countries?

Social mobility is the defining issue of our time, and there are many policy tools for alleviating poverty. The policy focus of our post-pandemic world should recognize that the best and most important way to climb the income ladder is through a job. Much of the policy focus during the pandemic has been on softening the blow from lockdowns and the corresponding lack of economic activity. However, these policies should be more like trampolines instead of mattresses. Smart policy can serve the valuable purpose of alleviating poverty, but programs designed to manage poverty are distinct from those aimed at boosting social mobility.

It is important to remember that the Coronavirus (COVID-19) pandemic has been a health crisis that triggered a short-term economic crisis. Before the pandemic hit, unemployment numbers were at an all-time low, and the economy showed strong—albeit not spectacular—growth. Many of the previous administration’s tax policies were still being tested, and their impacts were still not entirely clear. But there were certainly promising signs. New proposals should take care not to undo the successes from before the pandemic.

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