$700 Billion Investment in US Purchases and R&D Aiming to Create 5 Million Jobs
Corporate Tax Rate Reverted from 21% to 28%... "Will End Shareholder Capitalism"
"Trump Only Cares About Stock Gains" "I Focus on Working Middle Class"
Trump's Strong Economy Faces Attack Signals
[Asia Economy New York=Correspondent Baek Jong-min] Joe Biden, the Democratic presidential candidate in the United States, announced an economic pledge to invest $700 billion (approximately 841 trillion won) over four years in purchasing American-made products and research and development (R&D), while innovating manufacturing and raising the corporate tax rate.
The strengthening of manufacturing and corporate tax rates was a core part of Barack Obama administration's economic policy, clearly signaling an intention to revert policies to the pre-Donald Trump administration era.
Former Vice President Biden formalized this economic plan, named "Build Back Better," in a speech on the 9th (local time) in Dunmore, Pennsylvania.
In his speech, Biden emphasized, "When using taxpayers' money, we must buy American to support American jobs." The New York Times (NYT) evaluated that Biden countered Trump's 2016 presidential campaign strategy of "America First" with "Buy America." Trump had advocated slogans like "Buy America" and "Hire American" ahead of his January 2017 inauguration.
The core of Biden's economic pledge is allocating $400 billion for the government to purchase American-made products and services, and investing $300 billion in research activities for new technology development. It is expected to create 5 million new jobs.
Biden's camp plans to strengthen the current "Buy America" law to realize the pledge. Although the current law clearly focuses on the interests of American companies, it is judged that government agencies have loopholes to easily bypass it. The pledge also includes strengthening workers' selective bargaining rights and reducing tax benefits for American companies that move jobs overseas. Jake Sullivan, Biden campaign's chief advisor, told AP that "this will be the largest public investment since World War II."
The industries Biden strongly mentioned to foster include bio, clean energy, artificial intelligence (AI), 5G, and electric vehicles. In the case of clean energy, this can also be read as an expression of intent to differentiate from the Trump administration. After his election, Trump pursued support for the fossil energy industry, withdrawal from the Paris Climate Agreement, and promotion of the nuclear power industry, consecutively discarding policies of the Obama administration where Biden served as vice president.
Biden pledged to restore the corporate tax rate, currently at 21%, to 28%, the rate applied during the Obama administration. Regarding the corporate tax rate increase, he explained, "We will return the profits that had gone only to entrepreneurs and shareholders through stock price rises back to the workers."
Biden's corporate tax rate increase appears to target Trump's economic policy, which emphasizes only the stock market. In his speech, he harshly criticized Trump for being obsessed solely with the U.S. stock market's good performance, declaring, "I will end shareholder capitalism." He added, "During the COVID-19 crisis, Trump has only cared about the stock market, not you or your family," emphasizing, "If I become president, I will focus most on working middle-class families." This is interpreted as appealing to Rust Belt voters, Trump's support base, by emphasizing his blue-collar background.
The corporate tax rate increase included in this pledge is expected to provoke considerable backlash. On Wall Street, while predicting a high possibility of Biden's election victory, there are concerns that raising the corporate tax rate will cause significant turmoil in the stock and financial markets.
Regarding this, Jack Lew, former Treasury Secretary and part of Biden's camp, dismissed claims that Biden's election would be a disaster for the stock market, saying, "We can grow the economy while implementing tax policy wisely and fairly." He emphasized, "Once leadership in Washington DC stabilizes, the stock market and economy will actually perform well."
Biden's public announcement of his economic policy on this day is interpreted as reflecting his intention to present a clear alternative in the economic field, which Trump claims as his achievement, to gain an advantage in the upcoming presidential election.
Although Trump is trailing Biden by double digits in most major recent polls, he holds an advantage over Biden in the economic field in key battleground states.
USA Today, a day earlier, argued in a column titled "Democrats, the problem is the economy" that Biden and the Democrats must target Trump's last line of defense?the economy?to win the presidential election.
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