The voices of Tax Policy Center's researchers and staff
The House has a short-term patch for the Highway Trust Fund… Late Monday night, the House Ways & Means Committee released a plan to cover the Highway Trust Fund with $8.1 billion through mid-December 2015. The patch would use revenue collected by tightening IRS compliance rules. The House could vote on the bill today.
But the Senate is not impressed… Senate Republicans would prefer to extend the Highway Trust Fund through 2016 and come up with $25 billion to pay for it. Senate Democrats would consider the House’s short-term patch if the Senate could add in reauthorization of the Export-Import Bank.
Though maybe bipartisan support will build for corporate tax code changes to fund highways. Senators Rob Portman and Chuck Schumer are about to introduce a bipartisan proposal to tax $2 trillion in foreign profits held overseas by US corporations. Their tax rate—as yet unspecified—would be lower than the current US corporate rate of 35 percent.
Until then, the federal government warns about the cliff ahead… On July 31, the feds will stop sending states federal dollars for construction projects if Congress can’t come to a highway funding deal. Transportation Secretary Anthony Foxx continues to push for a six-year $275 billion fix for the Highway Trust Fund.
Meanwhile, the SFC may mark up a restoration of expired tax breaks next week. Tax Analysts reports that the Senate Finance Committee may mark up legislation to address expired tax breaks on July 21. But Chairman Orrin Hatch said, “Right now I’m more worried about highways than I am extenders.” Lobbying groups for businesses continue to pressure both the House and Senate for action on the expired breaks.
As for Michigan’s roads… Michigan House Republicans are reviewing the Senate’s plan to raise the state’s 19-cent-per-gallon gasoline tax to 34 cents. The Senate would also redirect $700 million in income tax revenue from the state’s general fund to roads. House Republicans are likely to want to include tax relief of some kind in any proposal. Whatever that relief is, it’s hard to imagine it rivaling the state’s MEGA tax credits.
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