Infra Insight Blog

On March 31, 2015, Congressman John K. Delaney (D-MD) spoke at the Washington Briefing of the International Bridge, Tunnel and Turnpike Association (IBBTA) in Washington, DC. At the event, Congressman Delaney provided an update on a bipartisan bill he has sponsored known as The Infrastructure 2.0 Act to fund the federal highway program. The bill uses international corporate tax reform to provide a six-year funding source for the Highway Trust Fund. Specifically, the bill establishes a mandatory, one-time 8.75% tax on existing overseas profits accumulated by U.S. multi-national corporations, which replaces the current deferral option and tax rate of 35%. The revenue generated would contribute $120 billion to the Highway Trust Fund and $50 billion to capitalize the American Infrastructure Fund – a new financing mechanism for transportation, water, energy, communication and education projects. The bill also establishes a bipartisan and bicameral commission to develop a permanent solution for ensuring solvency of the Highway Trust Fund.

Congressman Delaney expressed optimism that the bill would garner broad support because the revenue generated was devoted to improving the nation’s infrastructure – a topic generally favored by Democrats. At the same time, the bill also addresses international corporate tax reform – a topic generally favored by Republicans. One of the outstanding issues, however, is finding the sweet spot for a repatriation tax rate acceptable to both political parties and the White House. The GROW AMERICA Act 2.0 proposed by the White House Administration offers a 14% one-time, tax rate. By comparison, the Invest in Transportation Act, to be introduced by Senators Barbara Boxer (D-CA) and Rand Paul (R-KY), proposes a tax rate of 6.5%.