Bill Would Encourage Companies to Bring Hundreds of Billions of Dollars in Foreign Earnings Back to America; Proceeds Would Extend the Highway Trust Fund
WASHINGTON, D.C. – U.S. Senators Rand Paul (R-KY) and Barbara Boxer (D-CA) today introduced bipartisan legislation that would extend the Highway Trust Fund and create jobs. The Invest in Transportation Act of 2015, S. 981, incentivizes companies to bring some of the estimated $2 trillion in foreign earnings that are being held overseas back to the United States.
“Our nation’s highways and bridges are in desperate need of repair and demand our immediate attention. My legislation with Senator Boxer is a fiscally responsible approach to providing the necessary resources to correct the shortfalls in the Highway Trust Fund, while strengthening the U.S. economy and keeping jobs here at home. I am proud to work with Senator Boxer today to introduce the Invest in Transportation Act of 2015,” Sen. Paul said.
“This bipartisan repatriation proposal will stimulate the economy by bringing back hundreds of billions of American dollars currently sitting offshore back to America and will provide much-needed revenue to the Highway Trust Fund,” Sen. Boxer said.
The bill 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 have up to five years to complete the transfer, but must bring home money starting in the first year.
The measure would ensure that at least 25 percent of repatriated funds will be used for increased hiring, wages and pensions; research and development, environmental improvements; public-private partnerships; capital improvements; and acquisitions. Spending on R&D, increased hiring, and capital improvements only counts toward the 25 percent requirement if it does not supplant already-planned funding.
However, if a company increases its total spending on R&D, increased hiring, and capital improvements in the five-year period by more than 25 percent compared to the previous five-year period, the requirement that spending not supplant already-planned spending shall not apply. No funds may be spent on increases in executive compensation. 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 in less than two months 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, Georgia, Tennessee and Wyoming 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.
Click HERE to read the Invest in Transportation Act of 2015 in its entirety.
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