Certified public accountant Erin Roberts says President Biden’s $2.3 trillion infrastructure proposal (American Jobs Plan) won’t penalize most construction industry contractors. In fact, the cash infusion will benefit many. Because the majority of construction firms are “pass-through” (S corporations, sole proprietorships, partnerships) companies, they’re not subject to corporate taxes.
How Taxes May Impact Construction Industry Firms
Bipartisan support for the infrastructure initiative isn’t looking good (as of April 19, 2021). Republicans have issues with the proposal’s investments in electric cars and additional funding for disabled and eldercare. The GOP is examining another infrastructure plan that would cost about one-third of the current $2-trillion-plus proposal.
However, Biden referenced increasing taxes on individuals earning more than $400,000/year and that could impact pass-through construction industry companies. There has been no specific commitment to raising taxes on $400,000+ earners and it may become a negotiation point.
The Value-Added Trumps Higher Taxes
Biden’s American Jobs Plan may increase annual public spending on roads and bridges by 30%, according to Roberts. Even when spread-out over the years, it’s a significant amount of new spending for the construction industry.
The two U.S. political parties are about one-trillion dollars apart. Plus, the definition of the word “infrastructure” is up for debate. One Republican senator said only 30% of the plan “is actually infrastructure.”
Making Infrastructure History
Construction Monitor is a business that makes building permit information available to suppliers, subcontractors, and building industry professionals…This lead-generation service is available in all 50 US states, making Construction Monitor the nation’s largest provider of real-time building permit data. –Wikipedia
The general attitude about the infrastructure plan is, “It’s about time.” However it plays out, it will make history.
Have you ever “googled” yourself? Don’t be embarrassed. Most of us have at some time. We googled ourselves and Construction Monitor is cited for insightful construction industry information:
- 2011-2017 – Reported Californians were building more swimming pools than ever before despite the drought.
- Post-2009 – Revealed insight on how homeowners were responding to depressed home values and lending restrictions
- Pre-2020 – Solar power and green building trends reported
…This was relevant, actionable information that benefited companies like yours. Our construction industry analytics are only noteworthy when you use them to grow your business. In addition to creating a marketing strategy by studying what’s relevant today, you can apply historical data (because everything that goes around, comes around).
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