We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
Home » "Repatriation for infrastructure" concept gains traction at White House, Capitol Hill
newsworthy

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

February 5, 2015
Mark B. Solomon
No Comments

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.

Transportation Regulation/Government
  • Related Articles

    White House may rescind energy sector tax breaks to pay for infrastructure

    Shipper, business groups join call for White House intervention to end port strike at L.A., Long Beach

    Coyote struggles for traction in UPS parent's larger infrastructure

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Schneider welcomes first battery-electric truck

  • Fred Smith is not worried about Amazon

  • Outlook 2023: What’s in store for logistics/supply chain?

  • Ports, maritime operators see tide turning as ocean freight tsunami subsides

  • RJW LOGISTICS GROUP EXPANDS RETAIL LOGISTICS OPERATION TO DALLAS

Now Playing on DCV-TV

D991bf51 52ad 4867 98ff b56f4fe5dd93

State of the Industry: Fluctuations & Normalcy

DCV-TV 4: Viewer Contributed
In this second of a four-part State of the Industry video series, Greg Orr shares insights on the shifting fortunes of a cyclical truckload market and what passes for normalcy in this economy. The truckload market is famous for its boom-and-bust cycles. A downturn in the economy sends the market reeling with too...

FEATURED WHITE PAPERS

  • The five best applications for robotic lift trucks in warehouse environments

  • Fulfillment Facility Improved Efficiencies by 4x

  • 3PLs: Complete Orders Faster with Flexible Automation

  • Reusable Packaging for the New Wave of Supply Chain Automation

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing