Bipartisan duo: Offshore taxes only path for highway bill
Supporters of a plan to tax overseas profits to pay for U.S. transportation projects said Wednesday the proposal is the “only possible path forward” for passing a highway bill in the House this month.
The sponsors of legislation in the House containing the offshore taxes-for-roads proposal said the plan, known as repatriation, is the most viable option for paying for a long-term transportation bill. Lawmakers face an Oct. 29 deadline for renewing federal infrastructure spending.
“Our bipartisan bill, the Infrastructure 2.0 Act would use international tax reform to add $120 billion to the Highway Trust Fund and establish a new $50 billion infrastructure finance vehicle for use by states and local municipalities,” Reps. Richard Hanna (R-N.Y.) and John Delaney (D-Md.) said in a letter to House Majority Kevin McCarthy (R-Calif).
“We know that there is still a negotiation to do be done to agree on the rates for international tax reform and on how big of an increase we can make in our infrastructure investments,” Hanna and Delaney continued. “But the good news is that there is broad bipartisan consensus on the need for each of these reforms.”
House Ways and Means Committee Chairman Paul Ryan (R-Wis.) wants to tie a major infrastructure package to a revamp of the U.S.’s international tax rules for business, but Republican leaders in the Senate have expressed skepticism about the proposal.
The Senate has passed a bill that relies on a package of $47 billion in offsets from other areas of the federal budget to provide three years of highway funding, but the House has rejected the measure because it authorizes six years of transportation funding.
Hanna and Delaney said there is support for the repatriation idea, even if there is disagreement among lawmakers on the potential tax rates and the amount of revenue that should be dedicated to transportation.
“No one is happy with the status quo for our structurally deficient infrastructure and an international tax system that encourages U.S. companies to either relocate abroad or to keep their profits offshore rather than reinvest them in the U.S,” they wrote to McCarthy.
“There also seem to be no alternatives that can fund a long-term highway bill,” Hanna and Delaney continued. “Resorting to short-term patches means that we can’t engage in the long-term contracting necessary to properly build infrastructure. That means fewer jobs and continually deteriorating roads, bridges, and transit.”
McCarthy has vowed to pass a long-term highway bill and he expressed support for the repatriation idea.
During an interview last week on MSNBC’s “Morning Joe,” he said a repatriation plan would be preferable to a gas tax increase that has been sought by transportation advocates.
“That changes the inversion process; that means more money comes back to America,” he said.
“That puts a six-year highway bill on to the floor and starts moving and building roads that we need in American infrastructure,” he continued.
Hanna and Delaney said McCarthy should follow through on his promise because “now is the time to buckle down and cut this deal for the good of the American people.
“We hear time and again that ‘politics is the art of the possible,’” they wrote. “A Highway Trust Fund/International Tax reform deal is the only possible path forward for the long-term highway bill that our country needs.”
