Tax Reform and Infrastructure Funding

Floor Speech

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Mr. BLUMENAUER. Mr. Speaker, Politico yesterday had a fascinating story about Chuck Schumer, widely expected to become the next Democratic leader in the Senate, in talks with Republican leaders in the House and Senate about a major tax and infrastructure deal.

It would give a lower tax rate on hundreds of billions of dollars parked overseas by international corporations and use the tax on those proceeds to finance a more robust 6-year transportation bill. What is not to like?

I have been working tirelessly for us to be able to finance America's failing infrastructure, having introduced the first gas tax increase on the Federal level in 22 years. I have been working with stakeholders, like the U.S. Chamber of Commerce, organized labor, truckers, AAA, contractors, transit, the whole array of people who build, operate, use, and rely upon American infrastructure.

I am sympathetic to getting this job done. America is falling apart while we are falling behind. It doesn't work to try to pay for 2015 infrastructure with 1993 dollars.

The simple answer that Ronald Reagan successfully championed as President was raising the gas tax, in his case, 125 percent. It is taking hold around the country as even very red Republican States--six already this year--have raised their gas taxes, and our legislation in Congress is gaining more attention as people understand that this is the best way forward to solve the problem.

What is wrong with the deal that is being examined by Senator Schumer? Well, first of all, the path towards international tax reform is very complex and rocky, with many competing interests. No one disputes that the patchwork of our corporate tax system that we have currently is unfair to some and produces distorted results.

We have the highest stated statutory corporate tax rate in the world. But, for many corporations, that is not so much of a problem because they have been working to carve out their own exemptions and loopholes so that what the average that corporations pays is much less than the stated rate. But, for some, particularly those that build and operate in the United States, they do pay that statutory rate and it is a problem and it is unfair.

There is also still the incentive for some to park more money overseas. Most of us think that it is going to require revenue to buy down the corporate rate, to reform it, and repatriated dollars would be a source to adjust that in a way that doesn't make the deficit much, much worse.

There is also a problem of competitiveness. Some organizations actually have offshore operations to be closer to their markets. If you are going to sell in China, for instance, it makes sense perhaps to manufacture it there rather than ship it halfway around the world with all the complexity and expense.

I have been meeting with a wide variety of corporate tax officers who ask the question about equity. Why should they with their overseas operations pay for domestic infrastructure that everybody benefits from? That is a great question.

This has the potential of actually costing the Treasury more in the long run, making it harder to have an equitable adjustment in corporate tax reform, and shift the burden that should be paid by all American users instead concentrated on a small portion of American taxpayers on their overseas operation. They ask where is the equity, and it is hard to see.

That is why we have the basic principle of a user fee: People use a service and they pay for it. The gas tax for decades has served that purpose since it was first introduced in my home State of Oregon in 1919 for road construction. It is still the simplest, most direct, most fair, easiest to administer, and would enable us to solve this problem in a matter of months.

Unfortunately, the path we are on is very uncertain as well as unfair. We are going to have the 35th short-term extension of the highway trust fund next month. No country has become great building its infrastructure 10 months at a time.

The answer is not an elaborate deal that is being discussed which makes it less likely we solve the problems. Why don't we just deal with it directly, put hundreds of thousands of people to work at family-wage jobs, actually reduce the deficit, increase the economy, and strengthen the quality of life in communities large and small all across America.

Let's not engage in gimmickry. Let's rebuild and renew America.

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