Schumer And Portman propose business tax reforms to fund Highway Bill
The AP (7/9, Ohlemacher) reports that on Wednesday, Sens. Charles Schumer (D-NY) and Rob Portman (R-OH) released “a bipartisan framework” proposing a business tax reform to bring in revenue which would be used to fund the highway bill. The idea is that US corporations with foreign profits “parked overseas” would “pay a one-time tax on up to $2 trillion,” at a rate yet to be determined, but “considerably less than” the current 35 percent rate. The framework includes a “special tax rate for business profits from intellectual property” that seeks to “encourage” businesses to “assign patents to U.S. entities” so the company profits would be taxable by the US. House Ways and Means Committee chairman Rep. Paul Ryan (R-WI) “praised the framework,” while the White House gave a “more tepid” response.
The Hill (7/8, Becker) reported that Senate Majority Leader Mitch McConnell (R-KY) “threw cold water” on the idea, saying that “It may be a good idea, but I don’t think it applies to the current situation.” Meanwhile, Schumer “acknowledged he and Portman had a ways to go to flesh out all the details.” However, The Hill notes the framework for the international tax rules calls for terms sought by each party, with Republicans getting a system that will “shield most offshore corporate income from U.S. taxation,” while Democrats will get “tougher rules” to help prevent “multinational corporations from gaming the system by shifting profits to tax havens” as well as a “new tax incentive for domestic innovation.” A separate article in The Hill (7/8, Becker) said that the framework “could help form the core of a deal,” though it notes that the framework is “light on details.”
The Washington Post (7/9, Snell) reports the framework “does not specify how much money it would raise or how much could be applied to the Highway Trust Fund.” Yet, it is “likely to become part of the debate” over reauthorizing the Highway Trust Fund which expires July 31.
Morning Consult (7/9, Dobbs-Allsopp) reports that with the proposed framework, Senate Democrats “opened the door…to a possible short-term extension of the Highway Trust Fund,” so long as, according to Sen. Schumer, “it were used to buy time for a longer extension later this year.”
The Wall Street Journal (7/9, Peterson, Subscription Publication) reports that Sens. Schumer and Portman developed the framework as co-chairmen of a working group on reforming international taxation. A second Wall Street Journal (7/9, Nelson) piece reports that President Obama met with Senate Democrats at the White House on Tuesday, and is seeking support for a highway funding bill.
Greg Sargent writes at the Washington Post (7/9) “Plum Line” blog that the proposal indicates “Congress might finally be thinking seriously about funding our infrastructure,” though he adds that “the obvious long term solution…is to raise the gas tax.”
The Fiscal Times (7/9, Pianin) comments that Congress is “very likely to kick the can down the road yet again this summer” on long-term funding for transportation. Sens. Ron Wyden (D-OR) and John Hoeven (R-ND) “signaled” that “Congress most likely this month will pass another short-term extension.”