Bipartisan backing grows for corporate tax change tied to Highway Trust Fund.
If you were with us during our Manufacturing and Mining webinar on Monday afternoon, you heard Lauren Wilk of the National Association of Manufacturers talk about these possibilities for moving the so-far stalled highway funding bill and a couple of other legislative priorities on Capitol Hill.
The Los Angeles Times (7/14, Puzzanghera) reports that a soon-to-be-introduced “bipartisan proposal” in Congress “would tax the estimated $2 trillion in foreign profits held by US corporations in overseas accounts,” albeit at a rate far below the current 35%. Tens of billions of dollars are expected to be generated and would be used to replenish the Federal Highway Trust Fund.
The Times notes that the NAM and other business groups have expressed opposition to a “forced repatriation of foreign earnings” as a mechanism for highway funding, but the paper cites NAM Vice President of Tax and Domestic Economic Policy Dorothy Coleman as saying that the approach outlined by Sens. Rob Portman (R-OH) and Charles Schumer (D-NY) to simultaneously cut corporate tax rates, “changes the equation.” Coleman added: “We understand that we’ve got a lot of assets overseas that have not been taxed and that some kind of transition from one system to another will be part of a tax reform effort. The details are going to be very important to us.”
She said a key detail will be the tax rate on US companies’ foreign earnings. President Obama has proposed a 14% rate, while Portman says it should be much lower. In addition, Coleman said, money spent on factories and other fixed assets should be taxed at a lower rate than uninvested profits.
House GOP Proposes Temporary Highway Funding Extension. The AP (7/13, Espo) reports that House Republicans on Monday night issued a short-term legislative proposal calling for $8 billion to extend highway funding throughDecember 18. The extension would be mostly financed through a series of changes to promote tax compliance. “The bill also includes a $90 million tax cut for the producers of liquefied national gas and liquefied petroleum gas,” the AP reports, adding that “The House measure does not provide for the renewal of the Export-Import Bank.”