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Tuesday, March 21, 2023

Infrastructure? Where’s the Money?

Infrastructure? Where’s the Money?

Congress has little hope tax reform will be used to pay for President Trumpโ€™s $1 trillion infrastructure package.

The tax plan released Wednesday by the Trump Administration doesnโ€™t include any money to rebuild or repair U.S. roads, bridges, airports or other public works. The short proposal does include repatriation, which is taxing corporate earnings stashed overseas at a lower rate when it returns to the U.S., but does not indicate what the revenue should be spent on.

Those in favour of using repatriation as a funding tool for infrastructure are concerned. Rep. John Delaney (D-Md.) sponsored legislation supporting using repatriation funds to pay for infrastructure and says a massive infrastructure bill like Trump has touted wonโ€™t get over the finish line in Congress unless itโ€™s paired with tax reform.

Others, such as Freedom Caucus chairman Rep. Mark Meadows (R-N.C.), have expressed a willingness to be flexible. Meadows said that he would not insist that Trumpโ€™s tax overhaul include infrastructure funding, though he still believes that transportation investments are critical.

โ€œProbably giving more flexibility on the tax reform side of things is really where I am right now,โ€ Meadows told reporters.

โ€œObviously, I think repatriation and the infrastructure side of things is critical, but that being said, if we lower taxes and we have a different revenue stream somewhere else, itโ€™s not going to be one of those lines in the sand that I say, well, youโ€™re using repatriation for tax reform and youโ€™re not using it for infrastructure.โ€

Trumpโ€™s economic advisors have recommended that the president focus on a business tax cut bill this year that also includes funds for infrastructure in an effort to appeal to Democrats.

However, Sen. John Thune (R-S.D.) has said that may not work because there likely arenโ€™t enough lawmakers willing to support cutting business and corporate tax rates.

Last weekโ€™s proposal is just the beginning of a major push to pass a comprehensive tax reform package this year, so it canโ€™t be discounted that infrastructure will tie in at a later date.