ABSTRACT
In response to the COVID pandemic, the US federal government responded with approximately $5 trillion of relief spending, and the new administration of President Biden proposed an additional $4 trillion to “build back better.” This included huge investments in physical and human infrastructure that would produce environmentally and socially sustainable growth. This chapter discusses the two spending plans and examines how the administration proposes to pay for them through taxes. We introduce an alternative view of taxation, arguing that taxes need not be raised just because spending is going to increase. What matters is mobilizing resources and whether inflation may result from increased government spending. We conclude that the demands on resources will be manageable and argue that in real terms infrastructure spending pays for itself. © 2022 Elsevier Inc. All rights reserved.