Skip to content
Search AI Powered

Latest Stories

newsworthy

"Repatriation for infrastructure" concept gains traction at White House, Capitol Hill

Different proposals lead to same goal: fund surface transport programs through repatriated foreign profits.

It began with a bill from a freshman Congressman with no political experience. The idea that sprung from the bill, that foreign-earned profits repatriated by U.S. firms could be used to fund infrastructure improvements, has taken on a mini-life of its own.

In May 2013, Rep. John K. Delaney (D-Md.) introduced legislation to create an infrastructure fund seeded by the sale of $50 billion in bonds with 50-year maturities. U.S. corporations would be encouraged to buy the bonds by repatriating, tax free, part of their foreign earnings for each dollar they invest. Based on a predetermined ratio, bidders for the bonds would be able to repatriate a certain amount of dollars for each dollar they invest in the fund. The fund, meanwhile, would leverage the $50 billion investment to provide many more billions of dollars in infrastructure loans or guarantees.


Despite garnering plaudits—former Transport Secretary James H Burnley, IV, a veteran of Washington's transportation battles, called it the most original financing idea he'd seen in 30 years—Delaney's bill languished in legislative limbo. Now, just in the past few days, the concept has caught fire. In his fiscal 2016 budget request, President Obama proposed a mandatory one-time 14-percent repatriation tax to pay for half of his six-year, $478 billion infrastructure funding proposal (the balance would come from motor fuel tax receipts). Last Thursday, Sens. Barbara Boxer (D-Calif.) and Rand Paul, (R-Ky.), introduced legislation to allow companies to voluntarily repatriate earnings at a rate of 6.5 percent, well below the current 35-percent U.S. corporate income tax rate, as long as the proceeds are transferred into the Highway Trust Fund, the mechanism that funds infrastructure projects. U.S. firms have parked about $2 trillion in foreign earnings overseas, largely because they are loath to pay a 35-percent tax upon the funds' return to the U.S.

The Paul-Boxer bill, called the "Invest in Transportation Act of 2015," would give companies up to five years to complete the transfer into the Trust Fund. The favorable tax rate would only apply to reparations that have exceeded each company's average reparation activity in recent years, according to the legislation. Funds to be transferred must have been earned in 2015 or earlier. No funds may be spent on executive compensation increases, stock buybacks, or shareholder dividends for three years following the program's end.

Delaney, who has reintroduced his own bill, lauded Sens. Boxer and Paul for putting the issue in a "bipartisan sweet spot" where a deal can get done. "Two years ago when we started on this framework, no one was talking about combining international tax reform and infrastructure," Delaney said. "I'm heartened that more and more legislators are advocating our approach."

Congress has less than four months to pass a bill reauthorizing the Trust Fund, which is up for renewal May 31. If Congress cannot pass legislation, it can extend trust fund authority for a period of time; the current law, which was signed by President Obama in July 2012, was set to expire in September 2014 but was extended through May.

C. Kenneth Orski, a long-time public policy consultant and expert on infrastructure issues, said he doesn't think the idea of connecting repatriation and infrastructure will succeed because it doesn't have sufficient support in the House. Orski said that if a bill does advance, lawmakers would have to decide to either make repatriation mandatory as outlined in the White House budget proposal or make it voluntary as in the Boxer-Paul bill. Supporters of the Administration's plan argue that a voluntary scheme may not yield the revenue needed to create a robust funding stream.

Boxer's support could be a key factor in moving the legislative needle. Boxer, who is chairman of the Senate Environment and Public Works Committee, was the driving force in Congressional passage—against long odds—of the 2012 highway funding legislation. Boxer's influence, combined with the notion that she may want to leave a legacy of legislative success in the transport arena before she retires when her term is up in 2016, could help the initiative gain traction in both the House and Senate.

The Latest

More Stories

chart of GenAI effect on workforce

Gartner: GenAI tools create anxiety among employees

Generative AI (GenAI) is being deployed by 72% of supply chain organizations, but most are experiencing just middling results for productivity and ROI, according to a survey by Gartner, Inc.

That’s because productivity gains from the use of GenAI for individual, desk-based workers are not translating to greater team-level productivity. Additionally, the deployment of GenAI tools is increasing anxiety among many employees, providing a dampening effect on their productivity, Gartner found.

Keep ReadingShow less

Featured

warehouse worker driving forklift between racks

German 3PL Arvato acquires two U.S. logistics firms

The German third party logistics provider (3PL) Arvato this week acquired the U.S.-headquartered companies Carbel LLC and United Customs Services, saying the move would grow its client base, particularly in the fashion, beauty, and lifestyle segments.

According to Arvato, it made the move in order to better serve the U.S. e-commerce sector, which has experienced high growth rates in recent years and is expected to grow year-on-year by 5% within the next five years.

Keep ReadingShow less
photo collage of warehouse tech

Supply chain pros are wary of inflation and labor woes

The top worries that supply chain leaders hope to address with new innovations this year include inflationary concerns (68%) and labor shortages (50%), according to a survey on innovation from the third-party logistics provider (3PL) Kenco.

And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.

Keep ReadingShow less
volvo and waabi self driving truck

Volvo deepens partnership with Waabi for self-driving truck tech

Volvo Autonomous Solutions will form a strategic partnership with autonomous driving technology and generative AI provider Waabi to jointly develop and deploy autonomous trucks, with testing scheduled to begin later this year.

The two companies said they will integrate Waabi's virtual driver system, the Waabi Driver, into the Volvo VNL Autonomous, Volvo’s autonomous truck with redundant systems for enabling safe autonomous operations. The Volvo VNL Autonomous will be produced at Volvo’s New River Valley assembly plant in Dublin, Virginia, and be designed to support diverse operational needs, use cases, and Volvo Group truck brands.

Keep ReadingShow less
chart of women's portion of transport and storage jobs

Women hold only 12% of transportation and storage jobs worldwide

Women are significantly underrepresented in the global transport sector workforce, comprising only 12% of transportation and storage workers worldwide as they face hurdles such as unfavorable workplace policies and significant gender gaps in operational, technical and leadership roles, a study from the World Bank Group shows.

This underrepresentation limits diverse perspectives in service design and decision-making, negatively affects businesses and undermines economic growth, according to the report, “Addressing Barriers to Women’s Participation in Transport.” The paper—which covers global trends and provides in-depth analysis of the women’s role in the transport sector in Europe and Central Asia (ECA) and Middle East and North Africa (MENA)—was prepared jointly by the World Bank Group, the Asian Development Bank (ADB), the German Agency for International Cooperation (GIZ), the European Investment Bank (EIB), and the International Transport Forum (ITF).

Keep ReadingShow less