Senator Cory Gardner is co-sponsoring legislation to tax up to $2 trillion in corporate revenue that is currently stored in foreign banks to pay for domestic infrastructure projects. S. 981, the Invest in Transportation Act of 2015 sponsored by Sens. Rand Paul (R-Ky.) and Barbara Boxer (D-Calif.) would offer companies a 6.5 percent tax rate on profits they return voluntarily to the U.S. to boost federal transportation funding that is currently scheduled to expire on May 31.
Gardner says the plan, known as repatriation, is the most viable solution to preventing an interruption in the federal government’s transportation spending.
Extending the Highway Trust Fund is of critical importance for all Coloradans, and is a bipartisan priority,” he said in a statement. “Providing much-needed additions to this critical fund through a repatriation program is a vastly superior solution than imposing additional taxes on Coloradans. This bill would bring money currently held abroad back into our economy, while funding the key transportation investments our communities and businesses need to move forward.”
The Department of Transportation has said it will have to begin cutting back on payments to state governments for construction projects that are already underway in late July or early August if Congress does not reach a deal to extend the infrastructure funding. Lawmakers have turned to other areas of the federal budget to close the $16 billion gap in infrastructure funding in recent years, but the temporary patches are making it too difficult for state and local governments to plan long-term construction projects.
Gardner said the repatriation plan he is now co-sponsor would provide more than enough money to replenish the transportation department’s Highway Trust Fund without raising the gas tax. However, critics cite a Joint Committee on Taxation (JCT) study that found it would the federal government more in the long run than it brings in for transportation projects.
The nonpartisan JCT has said that a tax holiday would generate about $20 billion in revenue initially. The analysis said the plan would ultimately cost the federal government about $96 billion, as companies would have more incentive to keep their profits abroad and wait for another tax holiday.