By David Bauer, senior vice president of government relations, ARTBA
Senate Finance Committee Chairman Orin Hatch (R-Utah) and Ranking Democrat Ron Wyden (D-Ore.) July 8 released five bipartisan reports authored by their committee colleagues on different aspects of U.S. tax code reform that include recommendations to stabilize and grow the Highway Trust Fund’s (HTF) revenue stream. The “Community Development & Infrastructure Bipartisan Tax Working Group Report,” co-chaired by Senators Dean Heller (R-Nev.) and Michael Bennet (D-Colo.), largely focuses on how federal surface transportation investments should be supported in the future.
The working group recommends utilizing revenue from a new tax on overseas profits of U.S.-based multinational corporations to supplement existing HTF revenues to support a six-year reauthorization of the federal surface transportation programs. The report notes, “We realize this option may not be a permanent solution, but we believe it could provide an interim measure to addressing some of our nation’s most critical needs.”
The working group members join the Obama Administration and some on the House Ways & Means Committee in embracing filling the HTF revenue hole with repatriation tax revenue. The report does not include specifics for a repatriation plan, but a separate Finance Committee working group report details such a plan—although without explicitly saying the revenue generated should be dedicated to the trust fund.
For the long-term, the infrastructure work group recommends replacing current HTF revenue sources with a mileage based tax system or vehicle miles traveled (VMT) tax. The report calls for the initiation of a 5,000 volunteer VMT pilot program to gauge the practicality and challenges of implementing a national program.
The mission of the working groups was to recommend solutions to a series of challenges that could be solved as part of tax reform. As such, it is not surprising the infrastructure group recommendation would kill two birds with one stone by stabilizing the trust fund through reforming what many feel is inefficiency within the current U.S. tax structure.
Other members of the infrastructure working group included Senators Maria Cantwell (D-Wash.), Dan Coats (R-Ind.), Bill Nelson (D-Fla.), and Tim Scott (R-S.C.).