Will cross-border sellers face more taxes? The United States launches a $2 trillion infrastructure plan

Recently, in a speech, US President Biden announced to the media that "the most important federal investment since World War II" will continue to invest 2 trillion US dollars in infrastructure to release more jobs and opportunities, collectively known as the "American Jobs Plan".

This new investment (money distribution) plan is divided into the following contents:

1. $621 billion to rebuild the U.S. infrastructure, such as ports, railways, bridges and highways. The White House expects to repair 20,000 miles of roads, rebuild 10 major bridges and 10,000 small bridges.

2. Directly allocate $400 billion to the care industry for home care workers and the elderly and disabled, expand long-term care services under the Medicaid program, expand the nursing staff team and increase job wages.

3. $300 billion will be used to build and renovate more than 2 million housing facilities and build and improve more schools.

4. Invest $300 billion to improve the nation’s drinking water system, lay high-speed broadband to achieve 100% network coverage across the U.S., and upgrade the nation’s power grid to accelerate the transition to clean energy.

5. Allocate US$580 billion to support domestic manufacturing, increase investment and support in areas such as semiconductors and clean energy, and strive to make progress in R&D, manufacturing, and employment training.

In general, although this is not directly putting cash into the hands of Americans, the main purpose is to provide more jobs and higher salaries for Americans. Only with a job can there be a stable income. This wave of 2 trillion investment is still relatively beneficial to sellers.

In fact, at the beginning of this month, the United States just passed a 1.9 trillion US dollar economic stimulus plan. It took only 3 months from the announcement to the vote. After the plan was passed, cash was quickly distributed to Americans in the middle of the month, which really benefited us sellers from a wave of order growth. Now that the United States is preparing to invest another 2 trillion, sellers can't help but wonder, with so much money being printed so frequently, will the dollar become even less valuable?

It should be noted that this wave of money distribution is not directly printing money (expanding the balance sheet), but increasing taxation to subsidize jobs in turn. In the "American Jobs Plan", Baidu raised the company's federal tax rate from 21% to 28%, and raised the global minimum tax payable from about 13% to 21%. At the same time, it also ended federal tax breaks for fossil fuel companies.

The White House also mentioned that in addition to increasing the corresponding tax rate, it will also increase the tax enforcement efforts on corporate entities. That is to say, not only will the tax be enforced more strictly, but some situations that were originally in the gray area may also be legislated to determine taxation, such as the e-commerce sales tax that has had a significant impact on us. When there was no e-commerce, the sales tax law was aimed at physical businesses. Later, after the emergence of e-commerce, whether it should be subject to sales tax has always been a debate.

Of course, now that the e-commerce market is so large, all states have regarded e-commerce as a hot commodity and are scrambling to expand the scope of sales tax to the e-commerce sector. After the "American Jobs Plan", the United States may popularize more tax types to the e-commerce sector.

In summary, this "American Jobs Plan" will not be as effective as the previous economic subsidy plan, which will not directly make sellers a small boom, but it will have a long-term boost to the purchasing power of American consumers in the future, helping the entire e-commerce market to maintain vitality and further expand. The side effect is that in terms of taxation, the United States will move more towards tax compliance in the future. The reform of consumption tax (you can privately chat with me to get a tax map of consumption tax rates in each state) is only a bridgehead. There will be more taxes entering the e-commerce market, and sellers need to consider more tax aspects when setting up their US site.

The plan is still in its infancy and still needs to be reviewed by both houses of Congress. The Republicans have already expressed clear opposition to the plan, so even if it is implemented later, there will be many changes. I will continue to follow this far-reaching "American Jobs Plan" and will notify you as soon as there is any new information.