The latest proposal to fund highways and bridges – and one that could have momentum in the new Congress – has originated from an unlikely pair of U.S. senators: Rand Paul, R-Ky., and Sen. Barbara Boxer, D-Calif. They announced a plan on Thursday, Jan. 29, that would lower taxes on U.S. companies that bring back money from offshore accounts and invest it in transportation.
Paul and Boxer have dubbed their plan the Investment in Transportation Act of 2015.
The concept of bringing money back to the U.S. from foreign holdings is known as repatriation, and the money is currently taxed at 35 percent. The Paul-Boxer plan would lower the tax rate on repatriated funds to 6.5 percent. They hope the incentive will bring $2 trillion back to the U.S. economy.
Some of the repatriated proceeds would be sent to the Highway Trust Fund that pays for transportation programs. The fund currently relies on federal taxes on gasoline and diesel to pay for transportation, but revenue has lagged behind the needs of the Interstate system in recent years.
“I am pleased to be working with Sen. Boxer on a bipartisan solution to a tax and highway spending problem,” Paul, a possible contender in the 2016 presidential election, said in a joint statement. “The Interstate highway system is of vital importance to our economy. All across the country, bridges and roads are deficient and in need of replacement. We can help fund new construction and repair by lowering the repatriation rate and bringing money held by U.S. companies back home. This would mean no new taxes, but more revenue, and it is a solution that should win support from both political parties.”
Boxer added that repatriation will help fund more than just highways, but that the intent of their legislation would focus on highways. Boxer is the current ranking member and former chairman of the Senate Environment and Public Works Committee.
“I hope this proposal will jumpstart negotiations on addressing the shortfall in the Highway Trust Fund, which is already creating uncertainty that is bad for businesses, bad for workers and bad for the economy,” she stated. “I will also be working with (EPW Committee Chairman James) Inhofe and my colleagues on the Environment and Public Works Committee on other proposals to pay for rebuilding our nation’s aging transportation infrastructure.”
The U.S. conducted a repatriation tax holiday in 2004 to mixed reviews and successes.
In the U.S. House, Rep. John Delaney, D-Md., has filed a $170 billion transportation bill that calls for repatriated funds to be used to set up a national infrastructure bank. Delaney says his bill would leverage $750 billion in potential investments in transportation.
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