By Alicia McElhaney
WASHINGTON — President Barack Obama’s budget proposal includes a $478 billion plan to improve infrastructure through a one-time tax on corporate overseas holdings, mimicking Rep. John Delaney’s recently introduced bipartisan infrastructure bill.
“They basically copied our framework,” Delaney, D-Potomac, said Tuesday. “We’re flattered.”
Obama’s and Delaney’s plans include a one-time, percentage-based tax levied on overseas profits of multinational companies. This would replace the current system in which companies face a choice of either deferring payments by keeping the money overseas or paying a 35 percent tax to return it to the United States.
The tax dollars raised would benefit new infrastructure projects like bridges or roads funded by the Highway Trust Fund.
The key difference between the two plans is in tax percentage. Obama’s one-time tax would be 14 percent, while Delaney’s would 8.75 percent.
The 5.25 percentage point difference has gained Delaney bipartisan support, while Republicans are criticizing Obama’s proposal.
“Our tax rates are more focused on getting a bipartisan deal than Obama’s,” Delaney said.
Delaney said his bill, introduced in the House of Representatives last week and known as Infrastructure 2.0, , has a triple bottom line.
“It builds infrastructure, it brings money back from overseas and it fixes the system going forward,” the 6th District Democrat said.
In addition to levying a tax to support the Highway Trust Fund for six years, Delaney’s plan would establish a $50 billion infrastructure fund for state and local governments. It would also set up a commission to ensure the financial future of the Highway Trust Fund.
For Delaney, this framework is familiar. He used a similar method of garnering bipartisan support through the Partnership to Build America Act, which passed in 2013 and allowed for the sale of infrastructure bonds to private companies.
“The thing that makes this framework stand out is that Republicans and Democrats are supporting it,” Delaney’s press secretary, Will McDonald, said.
He said at least part of the Republican support came from Delaney’s legwork. Delaney said he met one-on-one with over 100 Republican representatives to convince them to pass the Partnership to Build America Act and plans to do the same for Infrastructure 2.0.
Despite differences, Delaney and McDonald said they hope Obama’s proposal has a positive impact on passing the Infrastructure 2.0 bill.
“Obama’s infrastructure tax is helping more people understand our proposal,” McDonald said. “It will remain to be seen what the impact is, but it will definitely build momentum behind it.”