Poll Shows Strong Public Support for Using International Tax Reform to Rebuild Infrastructure

Wide support for framework pushed by Rep. Delaney since 2013

WASHINGTON, D.C. – July 3, 2015 – (RealEstateRama) — According to a new poll conducted for Morning Consult 64% of registered voters think using overseas profits to build and maintain the nation’s highways is a good idea, including 70% of Democrats, 62% of Independents and 60% of Republicans. Since 2013 Congressman John K. Delaney (MD-6) has advocated for using repatriated revenues for new infrastructure projects, an innovative bipartisan solution that has secured support from both parties. Delaney’s Infrastructure 2.0 Act establishes an 8.75% tax on overseas profits, allowing that money to return back to our economy and providing revenues to fund a six year highway bill and create a new American Infrastructure Fund. Following the introduction of Delaney’s bill, President Obama included this framework in his 2016 budget.

“This poll confirms what I’ve seen first-hand in the halls of Congress and in meetings with constituents across Maryland: there is strong support for bringing trapped overseas revenues back home and using a portion of that revenue to rebuild our country,” said Congressman Delaney. “Combining international tax reform and infrastructure is a triple bottom line for the country: more jobs, a stronger economy and healthier business climate and a better quality of life for working families. Our national infrastructure deficit is a big problem and we need a big solution. I’ve met with over 100 members of each party, one on one, to pitch them on this framework and I am fully confident that legislation that combines new infrastructure investment and tax reform would pass the House of Representatives easily. Jobs, infrastructure, growth: this is good for both parties and it’s time for us to work together and get this done.”

The national poll was conducted between June 26-29 and can be viewed online here.

In 2013, Delaney introduced this framework to Congress with the Partnership to Build America Act, which ended last session with over 40 Republican and 40 Democratic cosponsors.

 

The Infrastructure 2.0 Act (H.R. 625)

 

  • Investing in 21st Century Infrastructure with Deemed Repatriation at 8.75% Tax Rate 
    • Under the Infrastructure 2.0 Act, existing overseas profits accumulated by U.S. multi-national corporations would be subject to a mandatory, one-time 8.75% tax, replacing deferral option and current rate of 35%.
      • $120 billion to the Highway Trust Fund, enough to meet funding gap at increased levels for six years.
      • $50 billion to capitalize the American Infrastructure Fund (AIF) a new financing mechanism for transportation, water, energy, communications and education projects. Leveraged to $750 billion, AIF financing (loans, bond guarantees and equity) is available to state and local governments. American Infrastructure Fund was first proposed in Rep. Delaney’s bipartisan Partnership to Build America Act.
      • $25 million pilot program to create regional infrastructure accelerators, similar to the West Coast Infrastructure Exchange
  • This frees the estimated $2 trillion in overseas earnings to return to the United States, spurring private sector re-investment and growth.

 

  • Creating Long-term Highway Trust Fund Solvency and Policy Certainty 
    • The Infrastructure 2.0 Act provides six years of HTF solvency, providing immediate certainty to the private sector and policymakers.
    • The legislation also establishes a bipartisan and bicameral commission that is tasked with developing a solution for permanent solvency of the Highway Trust Fund.

 

  • Building a Path for Broader Tax Reform
    • The Infrastructure 2.0 Act creates an eighteen month deadline for international tax reform.
    • To encourage action, the legislation includes a forcing function: if reform is not enacted, a fallback international tax package to make U.S. business climate more competitive would be implemented.
      • This pro-growth fallback reform package would end deferral, reduce anti-competitive over taxation, decrease taxes for companies paying fair rates abroad but increase taxes for companies in tax havens. This would eliminate the lock-out effect and allow for the free flow of profits back to the United States.
      • Under this option, for Active Market Foreign Income, a company would pay a 12.25% tax to the U.S. on overseas profits if they are currently paying no tax and a 2% tax to the U.S. if they are already paying the OECD average of 25% abroad, with a sliding scale in-between.
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