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American roads, rails and bridges are in need of massive repair. President Obama wants to tax American companies’ overseas profits to pay the bill. Is that the way to go?
Travel abroad and you will quickly see how American infrastructure has fallen behind. Fallen apart. Just traveling across town in this winter of big snow has been a challenge to aging systems. But how do we pay for an upgrade? This week, the Obama administration put a plan on the table. Tax huge overseas profits of GE, Pfizer, Microsoft, Apple and more. Put that windfall into American infrastructure. It could be a beginning of tax reform and American rebuilding. Is it a good idea? This hour On Point: Paying to rebuild, and a look-ahead at the next 30 years of American transportation.
-- Tom Ashbrook
Jonathan Allen, Washington bureau chief for Bloomberg News. Co-author of the book, "HRC: State Secrets and the Rebirth of Hillary Clinton." (@jonallendc)
Matthew Slaughter, associate dean and professor of economics at Dartmouth College's Tuck School of Business.
Alan Auerbach, professor of economics and law at the University of California, Berkeley. Director of the Robert Burch Center for Tax Policy and Public Finance.
From Tom’s Reading List
Bloomberg News: Obama Wants a New Tax on U.S. Companies' Overseas Profits -- "President Barack Obama will propose that U.S.-based companies pay a minimum 19 percent tax on their future foreign earnings, capturing profits that are now often beyond the government’s reach. Obama will also seek a 14 percent mandatory tax on about $2 trillion in stockpiled offshore profits, said two people familiar with his budget proposals, declining to be named because the document won’t be made public until Feb. 2. Companies would pay that tax regardless of whether they bring the money back to the U.S., the two said, creating a revenue stream the president would use to pay for roads, bridges and other infrastructure projects."
The Wall Street Journal: The Infrastructure Medicine Show — "Infrastructure is the latest salvation of the economy proposed by those who believe government must stimulate employment and demand. Infrastructure is a recent favorite of President Obama’s. And, in a sense, who could disagree? Now is always the right time for any investment project that will yield a positive return."
Reuters: Obama puts $1.3 bln price tag on new infrastructure muni bond plan — "President Barack Obama on Monday put an initial four-year price tag of $1.3 billion on his proposal for a new type of municipal bond to spur public-private partnerships for infrastructure projects. In his $3.99 trillion U.S. budget proposal, the tax-exempt Qualified Public Infrastructure Bonds (QPIBs) would cost $4.8 billion over about the next decade, from 2016 through 2025."
This program aired on February 5, 2015.