Senators Barbara Boxer (D-Calif.) and Rand Paul (R-Ky.) Jan. 29 announced they would be introducing legislation, “The Invest in Transportation Act of 2015,” that would attempt to generate new resources for the Highway Trust Fund (HTF) by allowing U.S. multinational companies to voluntarily bring overseas earnings back to the U.S. at a reduced tax rate. Boxer said, “I hope this proposal will jumpstart the negotiations on addressing the shortfall in the HTF, which is already creating uncertainty that is bad for business, bad for workers and bad for the economy.” Sen. Paul added the proposal, “would mean no new taxes, but more revenue, and it is a solution that should win support from both political parties.”
The Boxer-Paul plan was immediately met with criticism from a number of sectors. The nonpartisan Center for Budget & Policy Priorities observed a similar “repatriation” plan from 2004 was a “dismal economic failure” and that the Joint Committee on Taxation as estimated “a new repatriation holiday would lose $96 billion over 11 years.” Reacting to the proposal, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said, “Saying you’re going to use something that loses money to pay for anything is just wrong.” Senate Environment & Public Works Committee Chairman James Inhofe commented, “That’s not going to solve the problem…What we’re going to try to do is do it better.”
The responses to the Boxer-Paul plan should make clear to all that there are no easy solutions to stabilize and grow HTF revenues. The good news, however, is that this proposal and continuing talks about raising the federal motor fuels tax demonstrate members of Congress are actively working to find a path forward to end the cycle of recurring trust fund revenue crises and temporary highway/transit investment bills.