Senate Proposal for Infrastructure Bank Benefits Tax Dodgers
by Jessica Schieder, 1/23/2014
Sen.s Michael Bennet (D-CO) and Roy Blunt (R-MO) announced their intention to file legislation to establish an infrastructure bank funded by multinational corporations, which would receive significant tax forgiveness on their offshore profits in exchange for capitalizing the bank. The bill is the Senate companion of the Partnership to Build America Act (H.R. 2084), introduced by Rep. John Delaney (D-MD) last year.
Investing in American infrastructure – including bridges, levees, and roads – should without a doubt remain a top priority for lawmakers. The Center for Effective Government has discussed in detail the economic benefits and job creation this needed investment could produce.
However, this specific proposal would be funded by unfairly rewarding multinational corporations that have gamed the tax system and shifted their profits offshore in order to avoid U.S. taxes. The proposal entitles corporations to potentially steep tax discounts on offshore profits in exchange for the purchase of bonds to fund the infrastructure bank.
Citizens for Tax Justice (CTJ) reacted to the House proposal in June, saying:
[T]his is a strange and problematic way to fund infrastructure projects. In addition, Delaney’s bill will provide the greatest benefits to corporations that are engaging in accounting schemes to make their U.S. profits appear to be generated in offshore tax havens, further encouraging such tax avoidance and resulting in a revenue loss in the long-run.
Thankfully, there are fairer proposals available, which prioritize investment in American infrastructure without giving tax breaks to corporations. Rep. Rosa DeLauro (D-CT) has introduced a bill to create and fund an infrastructure bank using both public and private funding without rewarding tax avoidance.
For additional information on corporate tax avoidance and American infrastructure:
- Report: The Bridge to Prosperity: Reverse Reckless Cuts, Restore Our Infrastructure, and Revive Jobs, 12/13
- Report: The Corporate Tax Rate Debate: Lower Taxes on Corporate Profits Not Linked to Job Creation, 12/13
- Letter: Organizations Opposing Rep. Delaney’s Bill Creating a Repatriation Tax Amnesty and an Infrastructure Bank Controlled by Corporate Tax Dodgers, 7/16/13
- “CTJ Report: Proposal for Tax Holiday Rewards Tax Dodgers”, 6/26/13
- “How Do Billion-Dollar Corporations Cheat America Out of Tax Revenue?”, 4/9/13