Boxer, Paul to Introduce Bipartisan “Invest in Transportation Act”
Washington, D.C., Jan. 29, 2015—U.S. Senators Barbara Boxer (D-CA) and Rand Paul (R-KY) today announced that they will be introducing the Invest in Transportation Act of 2015, bipartisan legislation that would extend the Highway Trust Fund, which supports millions of jobs. The bill would also boost economic growth and create jobs by providing an incentive for companies to bring back some of the estimated $2 trillion in foreign earnings that are being held overseas.
Senator Boxer, Ranking Member of the Environment and Public Works Committee, and Senator Paul today released a white paper explaining the details of their proposal, which will be introduced in the coming weeks.To read the document, click here.
Senator Boxer said, “This bipartisan repatriation proposal is a win-win for our economy and our country. First, it will bring back hundreds of billions of dollars in foreign earnings that are sitting offshore, which can be invested here in America to create jobs. Second, the taxes paid on those earnings will be used to extend the Highway Trust Fund, which supports millions of jobs nationwide.
“I hope this proposal will jumpstart negotiations on addressing the shortfall in the Highway Trust Fund, which is already creating uncertainty that is bad for businesses, bad for workers and bad for the economy. I will also be working with Senator Inhofe and my colleagues on the Environment and Public Works Committee on other proposals to pay for rebuilding our nation’s aging transportation infrastructure.”
Senator Paul said, “I am pleased to be working with Senator Boxer on a bipartisan solution to a tax and highway spending problem. The interstate highway system is of vital importance to our economy. All across the country, bridges and roads are deficient and in need of replacement. We can help fund new construction and repair by lowering the repatriation rate and bringing money held by U.S. companies back home. This would mean no new taxes, but more revenue, and it is a solution that should win support from both political parties.”
The legislation would strengthen the U.S. economy and create jobs by allowing companies to voluntarily return their foreign earnings to the United States at a tax rate of 6.5 percent. The rate is only for repatriations that exceed each company’s average repatriations in recent years, and funds must have been earned in 2015 or earlier. Companies would have up to five years to complete the transfer.
The measure would ensure that a portion of the repatriated funds will be used for increased hiring, wages and pensions; research and development, environmental improvements; public-private partnerships; capital improvements; and acquisitions. Under the bill, no funds could be spent on increases in executive compensation, or on increases in shareholder dividends or stock buybacks for three years after the program ends. Also, any company that inverts within 10 years of participating in this program would have to repay the tax incentive with interest.
All tax revenues from the repatriation program would be transferred into the Highway Trust Fund, helping to address the urgent federal funding crisis facing America’s highways, bridges, and transit systems.
The authorization for surface transportation programs will expire on May 31st and the Highway Trust Fund is projected to face insolvency shortly after that. If Congress does not provide additional revenue to the Highway Trust Fund before that time, states will face cash-flow problems during the extremely busy summer construction season. Already Arkansas and Tennessee have delayed or canceled construction projects due to the uncertainty in federal transportation funding.
Addressing this shortfall with a viable and bipartisan transportation funding solution would have a real economic impact across the country, providing funding stability for state and local governments and businesses that rely on federal transportation funding, and helping to create or save millions of jobs.
Economic studies have found that repatriating some of the nearly $2 trillion in foreign earnings held by companies overseas could add several hundred billion dollars to GDP and help businesses create millions of jobs.