Welcome to Thoughts on the Market.

I'm Michael Zezis, Head of Public Policy Research and Municipal Strategy for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about the

intersection between U.S. public policy and financial markets.

It's Thursday, April 29th at 10 a.m. in New York.

Last night, President Biden addressed a joint session of Congress, laying out his multi-trillion

dollar plan to rebuild the country's existing infrastructure and build a new infrastructure

to deal with the environmental and social challenges facing the country.

He also laid out a multi-trillion dollar tax increase to help finance the whole thing.

Such dizzying numbers can be confusing when trying to figure out what it all means.

Here's three takeaways to help ground you as an investor.

First, taxes are going up, but probably not as much as advertised.

If you're a regular listener, you're familiar with our Rule of Two Joes, where President

Joe Biden lays out the ambition and Senator Joe Manchin, who we use as an example of moderate

Senate Democrats, lays out what's possible in terms of policy change.

These moderates hold sway because they're electorally vulnerable, thus more likely the

bargain for their interests, providing them substantial leverage in the Senate where Democrats'

50 seats gives them no margin for error on votes.

Applied to these proposed tax hikes, that means that instead of the capital gains tax

on incomes above 1 million going to 39.6%, we think it goes to 30%.

Instead of the corporate tax rate going to 28%, we think it lands at 25%.

In some campaign proposals, like a fresh payroll tax on incomes above $400,000, don't

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