Paul: Fund infrastructure by lowering repatriation rate

Sen. Rand Paul (R-Ky.) proposed Congress fund the Highway Trust Fund by lowering corporate tax rates. 

“The interstate highway system is of vital importance to our economy,” Paul said Tuesday. “All across the country, bridges and roads are deficient and in need of replacement.”

{mosads}Paul said U.S. companies currently hold more than $2 trillion of profits overseas, but if the repatriation rate were lower than the current 35 percent, the companies would return to the United States.

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

His comments come as the Department of Transportation announced that it would have to reduce road and transit payments this summer if Congress doesn’t pass legislation to increase funding for the Highway Trust Fund, which will have only $4 billion in August.

The Highway Trust Fund is financed by the 18.4 cents-per-gallon gas tax, but some lawmakers have proposed raising that since the rate hasn’t been increased for nearly 20 years, causing the funding shortfall.

Paul has introduced S. 911, which would reduce the repatriation rate to 5 percent. Paul argues lowering that tax on companies would generate more revenue because it would incentivize U.S. investments.

Both chambers have proposed short-term extensions in transportation funding. The Senate bill would provide $9 billion to carry infrastructure spending through the end of the year, and the House bill funds transportation projects for a year through cuts at the U.S. Postal Service.