Lawmakers want to withdraw a share of the $2.1 trillion that U.S.-based corporations hold in bank accounts overseas in order to pay for much-needed updates to the nation’s infrastructure.
Since the stimulus bill was created and implemented in the first months of President Barack Obama’s tenure in early 2009, the nation’s roads and bridges have become a political issue, specifically on how to pay for the infrastructure repairs. Both Democrats and some Republicans are now expressing support for revamping the international tax system, and using the funds to help America's crippled infrastructure.
While there seems to be some consensus on where the funds should be generated from, some lawmakers are objecting to using the money without corporations getting something in return -- specifically a tax cut on the nation’s corporate tax rate. America’s corporate tax rate is one of the highest in the world, currently at 35 percent, according to The Hill.
In the past, Republican lawmakers have said that the funds should be used to bring down the tax rate. Now, many opinions have changed, but some Republicans still believe that a reduced tax rate will allow corporations to bring more jobs and funds back to the United States.
“You can’t spend those dollars twice,” Republican Rep. Kevin Brady of Texas said, one of the more vocal voices of tax reform.
With the deadline to fund the Highway Trust Fund approaching in just six weeks, lawmakers are under pressure to find common ground and create a solution to the infrastructure and tax problem. The White House has already stated their support of using overseas funds for infrastructure spending, but made no mention of a possible reduction in the corporate tax rate.
The Obama administration and congressional Republicans both agree that the corporate tax rate needs to be reduced from its current rate to the 20s. Democrats are objecting to this, despite reports that the tax rate decline would net the U.S. economy around $250 billion.
“The amount of money that you’re going to get on a permanent basis on international tax reform would hardly make a dent in the rates,” said Democratic Sen. Ben Cardin of Maryland.
In March 2015, Bloomberg News reported on the billions of dollars in profits that large technology companies, such as Google, Microsoft and Apple, netted in a given year. According to Bloomberg, these companies in addition to five others “now account for more than a fifth of the $2.1 trillion in profits that U.S. companies are holding overseas.”