Beyond Bulls & Bears


Quick Thoughts: The American Jobs Plan is Not Just an Infrastructure Plan

The American Jobs Plan is not only the biggest traditional infrastructure proposal in over 50 years, but if approved, it will also fund significant investments in human and environmental infrastructure. However, its implications include significant changes to corporate and individual tax rates. Chief Market Strategist Stephen Dover believes environmentally aware investing will likely substantially increase and fossil-fuel companies will likely lose. He says the wise investor will look at how infrastructure is changing.

This post is also available in: German

The biggest infrastructure proposal in over 50 years, The American Jobs Plan1 is not a traditional infrastructure plan. In addition to roads and bridges, it proposes significant investment in human infrastructure, education, and research, and is strongly focused on environmental infrastructure. It also makes significant changes to corporate and individual tax rates. If approved, it will have significant effects on the global economy and investments.

  • American infrastructure spending has fallen behind other countries, especially China, which spends 10 times more than the United States. The US lags South Korea, Canada, and 36 other countries in infrastructure investments as a percentage of GDP.2
  • The Plan’s focus on the environment is consistent with global investments in infrastructure that include Europe’s US$2 trillion “Green Deal” and China’s US$900 billion “Belt and Road” initiative. The structure of the global economy is going through tremendous change, led by government initiatives.
  • In the short term, the Plan will provide jobs and stimulate the economy. The Plan’s long-term objective is to increase the productive capacity of the US economy.
  • Corporate tax increases will affect earnings and the direction of corporate investments. The proposed global corporate minimum tax could affect where global companies locate, and which countries benefit from corporate taxation. Higher corporate taxes may make US companies less competitive. Capital gains and estate tax changes will affect how individuals invest and may cause them to focus more on tax implications.
  • Environmentally aware investing will likely substantially increase, as will investments made in technology, semiconductors, green companies and builders, municipal bonds, real estate, manufacturing, logistics, and exporters. Smaller companies may also benefit from domestic spending and tax increase exclusions.
  • Fossil-fuel companies, companies with lots of stock buybacks, companies with foreign production sold in the US, and global companies with low tax rates in other countries will likely lose.

The investment landscape is changing, and what worked in the past may not work going forward. Financial forecasts based on decades-old trends are less likely to be of great value. The wise investor will look at how the future will be different from the past.

Important Legal Information

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. All investments involve risks, including possible loss of principal.

Data from third party sources may have been used in the preparation of this material and Franklin Templeton (“FT”) has not independently verified, validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments opinions and analyses in the material is at the sole discretion of the user. ​

Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affiliates and/or their distributors as local laws and regulation permits. Please consult your own financial professional or Franklin Templeton institutional contact for further information on availability of products and services in your jurisdiction.​

Issued in the U.S. by Franklin Templeton Distributors, Inc., One Franklin Parkway, San Mateo, California 94403-1906, (800) DIAL BEN/342-5236, – Franklin Templeton Distributors, Inc. is the principal distributor of Franklin Templeton U.S. registered products, which are not FDIC insured; may lose value; and are not bank guaranteed and are available only in jurisdictions where an offer or solicitation of such products is permitted under applicable laws and regulation.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

What Are the Risks?

All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Smaller and newer companies can be particularly sensitive to changing economic conditions. Their growth prospects are less certain than those of larger, more established companies, and they can be volatile. The technology industry can be significantly affected by obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants as well as general economic conditions. Investments in fast-growing industries, including the technology and health care sectors (which have historically been volatile) could result in increased price fluctuation, especially over the short term, due to the rapid pace of product change and development and changes in government regulation of companies emphasizing scientific or technological advancement or regulatory approval for new drugs and medical instruments.

Investments in infrastructure-related securities involve special risks, such as high interest costs, high leverage and increased susceptibility to adverse economic or regulatory developments affecting the sector. Because municipal bonds are sensitive to interest rate movements, a municipal bond portfolio’s yield and value will fluctuate with market conditions. Bond prices gener­ally move in the opposite direction of interest rates. Thus, as prices of bonds in an investment portfolio adjust to a rise in interest rates, the portfolio’s value may decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. Investments in lower-rated bonds include higher risk of default and loss of principal.

Actively managed strategies could experience losses if the investment manager’s judgment about markets, interest rates or the attractiveness, relative values, liquidity or potential appreciation of particular investments made for a portfolio, proves to be incorrect. There can be no guarantee that an investment manager’s investment techniques or decisions will produce the desired results. Past performance does not guarantee future results.

This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only, and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation and risk tolerance.

Franklin Templeton (FT) does not provide legal or tax advice. Federal and state laws and regulations are complex and subject to change, which can materially impact results. FT cannot guarantee that such information is accurate, complete or timely; and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.


1. Source: The White House, “FACT SHEET: The American Jobs Plan,” March 21, 2021.

2. Source: Statista, Global investments on the construction and maintenance of infrastructure as share of GDP in 2018, by country, December 10, 2020.

Get Content Alerts in My Inbox

Receive email alerts when a new blog is posted.