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Highway funding: Gaining momentum

By |  March 5, 2015

Legislators are actively formulating plans to shore up the Highway Trust Fund.

The aggregates industry has been asking for another multi-year transportation infrastructure bill for years, and talk of one has heated up in recent months in Washington. Here’s a look at a couple of the highway-funding proposals that were recently put forth, as well as a taste of some of the discussions that have been taking place in the nation’s capital.

Obama proposes six-year plan

President Barack Obama proposed a 14 percent tax on overseas profits that would raise $238 billion over six years and create a $478 billion infrastructure budget, the National Stone, Sand & Gravel Association (NSSGA) reports.

“This transition tax would mean that companies have to pay U.S. tax right now on the $2 trillion they already have overseas, rather than being able to delay paying any U.S. tax indefinitely,” a White House official says.

The official added that the tax would encourage firms to create more jobs in the United States.

According to the White House, the $238 billion would be used to fund a broader $478 billion public works program of road, bridge and public transport upgrades. The remaining $240 billion would come from the federal Highway Trust Fund, which is financed by gas taxes, NSSGA reports.

“The aggregates industry welcomes the president’s proposal because it focuses much needed revenue to rebuild our nation’s crumbling infrastructure,” says Mike Johnson, president and CEO of NSSGA. ”While this approach avoids some of the political difficulties that many other measures face, it will be an uphill struggle to get it through Congress.”

Senators have own proposal

In addition to Obama’s proposal, Sens. Barbara Boxer (D-Calif.) and Rand Paul (R-Ky.) announced plans to introduce their own bill in the “Invest in Transportation Act of 2015,” which they say would extend the Highway Trust Fund, boost economic growth and create jobs.

The legislation would allow companies to voluntarily return their foreign earnings to the U.S. at a tax rate of 6.5 percent, the senators say. It would also ensure that a portion of the repatriated funds would be used for increased hiring, wages and pensions.

In addition, through the bill, all tax revenues from the repatriation program would be transferred to the Highway Trust Fund.

“This bipartisan repatriation proposal is a win-win for our economy and our country,” Boxer says. “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.”

Senate committee weighs in

The Senate Environment and Public Works Committee also weighed in, beginning its transportation reauthorization efforts with a hearing that featured Transportation Secretary Anthony Foxx and the governors of Alabama and Vermont, as well as the South Dakota Secretary of Transportation. Members at the hearing urged for a long-term highway bill solution.

During the hearing, Sen. David Vitter (R-La.) concluded that Congress has three options for fixing the Highway Trust Fund: a gas tax hike paired with a tax cut of some other kind; repatriation; or use of some of the revenue from additional domestic energy production.

Vitter says he believes an 18.4-cents-per-gallon hike in the fuel tax could pass if paired with a lower-middle class and middle-class tax cut. Vitter also says tax repatriation would only be a short-term solution, and that royalties from increased domestic energy production could be a part of the solution.

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