Ryan: Offshore profits ‘Plan A’ for highways
House Ways and Means Chairman Paul Ryan (R-Wis.) made it clear Thursday that tapping offshore corporate profits was his top choice for funding a longer-term highway bill.
In fact, Ryan declined to even lay out what the House GOP’s “Plan B” might be, ahead of a looming July 31 deadline for highway funding.
The Wisconsin Republican and other top lawmakers in both parties have said they could get behind a short-term highway extension until the end of the year — at a cost of about $8 billion — to allow lawmakers to work on a revamp of the international tax system that could fund infrastructure projects.
“That’s what our first preference is,” Ryan said at a breakfast sponsored by Politico, adding that a new framework for international taxes and highways from Sens. Rob Portman (R-Ohio) and Chuck Schumer (D-N.Y.) “tracks with what the House has been doing.”
Plans from both sides of the aisle, and the bipartisan framework from Schumer and Portman, have proposed taxing the roughly $2 trillion that businesses have offshore well below the current 35 percent corporate rate and using that money for highways. Ryan said that sort of proposal would only work as part of a broader tax revamp that shielded most offshore corporate profits from U.S. taxation.
He also reiterated that Congress wouldn’t raise the gas tax, the Highway Trust Fund’s primary funding source, a point Senate Majority Leader Mitch McConnell (R-Ky.) made this week as well. Instead, Ryan said that a six-year highway deal would allow lawmakers to investigate new ways for user fees to fund infrastructure projects, given that higher fuel efficiency standards have lowered the gas tax’s effectiveness.
“We want a six-year highway bill,” Ryan said. “We want to give states the ability to plan ahead.”
But there are plenty of obstacles toward getting a long-term highway deal — not least the fact that McConnell, Senate Finance Chairman Orrin Hatch (R-Utah) and other key GOP senators have been cool to the idea of using the offshore profits for highways.
Some Senate Republicans, seeking to keep their majority in 2016, have said they want to extend highway projects past next year’s elections. McConnell said this week that he would bring a highway bill to the Senate floor as soon as next week.
The details of an international tax revamp — including what rate to tax the roughly $2 trillion offshore and whether to give new incentives for intellectual property — will also undoubtedly prove challenging for tax writers.
But Ryan maintained that the interest of top Democrats such as Schumer in a plan that would exempt most offshore corporate profits from U.S. taxation, something Republicans have long favored, was at the very least a good start as lawmakers search for solutions.
