President Donald Trumps plan to use corporate profits returned from overseas to help finance nationwide improvements to roads, bridges, airports and other public works picked up an important supporter in the U.S. House: Representative Bill Shuster. <\/p>\n
The dollars are out there, so we get a piece of that, Shuster, a Pennsylvania Republican who chairs the House Transportation and Infrastructure Committee, said in an interview. The process of returning corporate profit to the U.S., known as repatriation, can be one of the sources that helps generate funding for repairs and new construction, he said. <\/p>\n
Photographer: Andrew Harrer\/Bloomberg <\/p>\n
Trump has proposed spending $1 trillion during the next decade on U.S. infrastructure and wants to leverage more private-sector dollars. Gary Cohn, Trumps chief economic adviser, said on Fox Business on Feb. 3 that the president wants to use proceeds from repatriation to help fund the improvements. <\/p>\n
U.S. companies have an estimated $2.6 trillion in profits that theyve earned overseas and are keeping there. Under federal tax law, offshore earnings arent taxable in the U.S. until companies decide to return the income to America. Trump and House Republicans have called for establishing a lower tax rate on those profits, easing their return to the U.S. <\/p>\n
But theres been less agreement about how to use the resulting tax revenue. Shuster said he expects a lot of it would be used to offset broader tax-rate cuts, as House Republican leaders have proposed. What exactly is the funding, thats what were going to try to figure out and debate and move, Shuster said. Everythings going to be on the table. <\/p>\n
Democrats have said theyre willing to work with Trump on infrastructure, including in the Senate, where lawmakers have proposed spending $1 trillion during the next 10 years. Republican congressional leaders, however, are pushing for private investment to play a bigger role. Republican House Speaker Paul Ryan has said he would like to see $40 in private spending for every additional federal dollar. <\/p>\n
Asked whether Ryan supports using repatriation for infrastructure, spokeswoman AshLee Strong said only that congressional leaders will work with the Trump administration to craft a fiscally responsible infrastructure plan. <\/p>\n
Witnesses at the first hearing of the House Transportation and Infrastructure Committee last week, including FedEx Corp. Chairman and Chief Executive Officer Frederick Smith, said they dont think additional private-sector funding will be enough to meet the nationwide need. They said additional federal spending, from a gas tax that hasnt been increased since 1993 or other sources, must be included. <\/p>\n
Shuster said a combination of additional federal spending and increased private investment will be needed but said he couldnt provide the precise mix. Asked whether hed support increasing the gas tax, Shuster didnt rule it out as part of negotiations to get a final package. <\/p>\n
That is certainly a difficult thing to do, he said. Its something we should look at and consider. <\/p>\n
One thing he cant support: creating a federal infrastructure bank to provide funding for projects, Shuster said. Senate Democrats and Steve Mnuchin, Trumps choice to be Treasury secretary, have floated that concept, but Shuster said he feared it would become a boondoggle in Washington. <\/p>\n
Its also important that whatever infrastructure package emerges be done in cooperation with U.S. states, Shuster said. <\/p>\n
You have to have the states buy-in to this infrastructure bill and what they want to do, he said. <\/p>\n
Keep up with the best of Bloomberg Politics. <\/p>\n
Get our newsletter daily. <\/p>\n
Its also likely that infrastructure could help get Democrats to accept changes they may not want on taxes and health care, Shuster said. <\/p>\n
As we go through Obamacare and tax reform, for the Democrats, theres some bitter pills that they may have to swallow, Shuster said. And the sweet chaser is infrastructure dollars. <\/p>\n
<\/p>\n
Originally posted here: <\/p>\n
Trump's Plan to Tap Offshore Profit for Infrastructure Gains an Ally ... - Bloomberg<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" President Donald Trumps plan to use corporate profits returned from overseas to help finance nationwide improvements to roads, bridges, airports and other public works picked up an important supporter in the U.S. House: Representative Bill Shuster. Continue reading