Senators propose tax incentive to fund US highways

Two US senators, one a Republican and the other a Democrat, proposed a tax incentive for  U.S. companies to bring home their offshore cash stockpiles and pledging to use that revenue to fund highways.

Senators Rand Paul, a Kentucky Republican, and Barbara Boxer, a California Democrat, would let companies repatriate money parked overseas at a 6.5 percent tax rate.
Bloomberg reported that US companies have stockpiled about $2 trillion outside the country, in part because that’s where they’re earning profits and in part because they have used accounting maneuvers to book profits in low-tax jurisdictions.
Under current law, U.S. companies must pay the full tax rate of 35 percent when they bring home profits from overseas, after receiving credits for foreign taxes they have paid.
It’s not clear that the plan would actually raise revenue. The nonpartisan Joint Committee on Taxation, the official scorekeeper for tax bills, said last year that a similar proposal would cost the government $95.8 billion over a decade.
That’s because companies would interpret a repeat of a tax holiday enacted in 2004 as a sign that they should shift even more profits outside the U.S. in anticipation of another holiday.
Read more


More Posts

Send Us A Message

World class Practice Support

SAIBA members get Exclusive world-class Practice Support.