This story appears in the March 2 print edition of Transport Topics.
WASHINGTON — Sen. John Thune, chairman of the Senate Commerce, Science and Transportation Committee and the chamber’s third-ranking Republican, said a tax overhaul could solve the short- and long-term funding woes facing the federal transportation system.
The South Dakota Republican said he would consider several funding proposals, such as repatriation, to boost transportation as long as they are linked to tax reform.
“My view on repatriation: I think you can do that in the context of a broader tax reform effort,” Thune said at an event here Feb. 26.
Linking tax reform to funding transportation programs is gaining support in the halls of Congress. Many Republican leaders say they are for it, and several key Democrats are likely to endorse tax reform this year since the Obama administration has proposed using money from tax changes to fund a six-year highway bill.
Republicans also appear to back a one-time repatriation tax holiday. House Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) has endorsed the concept. And Rep. Paul Ryan (R-Wis.), chairman of the tax-writing Ways and Means Committee, has said a comprehensive tax overhaul was the way to boost the Highway Trust Fund for five or six years.
For Democrats, Rep. John Delaney of Maryland has been floating a measure that would create a $50 billion infrastructure bank funded by selling bonds to private companies that could repatriate part of their overseas earnings tax-free.
The White House and former Ways and Means Chairman Dave Camp (R-Mich.) took a look at repatriation as a way of increasing transportation dollars during talks last year. Congress adjourned without acting on a plan.
The current tax system allows companies to defer taxes until they bring back foreign profits. Many multinational firms keep or reinvest profits overseas instead of subjecting them to a 35% repatriation tax.
Funding authority for highway programs expires at the end of May. That affords the Republican-led Congress a powerful legislative tool to reach a funding compromise with the administration. Thune did not say he would support increasing fuel taxes to pay for highway programs. Those revenues are no longer enough to maintain the country’s transportation network.
“As a conservative we can’t continue to borrow from the general fund and hand the bill to our children and grandchildren,” said Thune, whose committee has jurisdiction over trucking regulations.
Thune also indicated provisions could be adopted in a highway bill to draw in private capital to fund big-ticket projects.
“I do think that . . . infrastructure is important. It’s part of our competitive advantage: the Interstate Highway System, supply chain from railroads to highways to ports — all those things work together to make us competitive in a global economy. It’s important that we make the necessary investments. A part of that is a lot of private investment but government has a role to play,” he said.