Unlikely Duo Propose Alternative to Obama's Tax to Fund Infrastructure

A few days before President Obama announced his 14 percent offshore corporate profits tax, Sens. Rand Paul and Barbara Boxer teamed-up to announce they would be offering a repatriation tax, somewhat similar to Obama's tax. Both fund infrastructure.

2 minute read

February 3, 2015, 7:00 AM PST

By Irvin Dawid


"Sens. Barbara Boxer, D-Calif., and Rand Paul, R-Ky., plan to introduce legislation that would lower the federal tax on offshore corporate earnings returned to the U.S. to generate billions of dollars for transportation infrastructure projects," writes Jim Watts for The Bond Buyer. "Boxer said the measure would provide an incentive for companies to bring back, or repatriate, some of an estimated $2 trillion of foreign earnings."

Unlike President Obama's 14 percent "one-time, mandatory tax on previously untaxed foreign earnings" included in his 2016 federal budget proposal that he announced on Monday, the forthcoming Invest in Transportation Act will be a repatriation tax, that is, it taxes only the funds earned overseas by corporations that are returned to the United States. Revenue from both taxes would be directed to the Highway Trust Fund.

The Paul-Boxer plan amounts to a "tax holiday," which President Obama opposes, as does Sen. Orrin Hatch, chairman of the Senate Finance Committee. He "said the repatriation plan would cost the federal government more in the long run than it brings in for transportation projects," writes Keith Laing of The Hill.

"The repatriation legislation would allow multinational corporations to voluntarily return their foreign earnings to the United States over the next five years at a tax rate of 6.5% rather than the current 35%," writes Watts.

We can help fund new construction and repair by lowering the repatriation rate and bringing money held by U.S. companies back home," (Sen. Paul) said. This would mean no new taxes but more revenue, and it is a solution that should win support from both political parties."

According to transportation reporter Heather Caygle in Monday's Politico Morning Transportation, "the president’s proposal is closer to Rep. John Delaney’s bill. The rates are different — companies would be taxed at a lower rate in the Delaney bill [8.75%]— but both plans have a mandatory tax, shore up the Highway Trust Fund for six years and are couched in a broader overhaul."

Ideally, an increase in the federal gas tax, such as the bipartisan Corker-Murphy plan in the Senate, would erase the Highway Trust Fund shortfall, i.e., the difference between between gas tax receipts and transportation expenditures.

According to Watts, "CBO estimated the annual HTF revenue shortfall at $13 billion in fiscal 2016, $14 billion in fiscal 2017 and 2018, and $15 billion by fiscal 2019."

Alternatively, motorists could drive more in less fuel efficient vehicles, burning more fuel and thus increasing gas tax receipts, though that would defeat President Obama's climate goal of reducing greenhouse gas emissions.

Thursday, January 29, 2015 in The Bond Buyer

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 16, 2025 - Diana Ionescu

Green vintage Chicago streetcar from the 1940s parked at the Illinois Railroad Museum in 1988.

Chicago’s Ghost Rails

Just beneath the surface of the modern city lie the remnants of its expansive early 20th-century streetcar system.

July 13, 2025 - WTTV

Blue and silver Amtrak train with vibrant green and yellow foliage in background.

Amtrak Cutting Jobs, Funding to High-Speed Rail

The agency plans to cut 10 percent of its workforce and has confirmed it will not fund new high-speed rail projects.

July 14, 2025 - Smart Cities Dive

Worker in yellow safety vest and hard hat looks up at servers in data center.

Ohio Forces Data Centers to Prepay for Power

Utilities are calling on states to hold data center operators responsible for new energy demands to prevent leaving consumers on the hook for their bills.

July 18 - Inside Climate News

Former MARTA CEO Collie Greenwood standing in front of MARTA HQ with blurred MARTA sign visible in background.

MARTA CEO Steps Down Amid Citizenship Concerns

MARTA’s board announced Thursday that its chief, who is from Canada, is resigning due to questions about his immigration status.

July 18 - WABE

Rendering of proposed protected bikeway in Santa Clara, California.

Silicon Valley ‘Bike Superhighway’ Awarded $14M State Grant

A Caltrans grant brings the 10-mile Central Bikeway project connecting Santa Clara and East San Jose closer to fruition.

July 17 - San José Spotlight