United States based corporations who bank some of their earnings and revenues abroad are required to pay 35 percent of any money they bring back into the U.S. On average, offshore taxes are in the mid-single digits. In this environment, companies that are not repatriating funds are saving approximately 30 percent by keeping their capital offshore. According to an article in TheHill.com, an estimated $2 trillion in earnings are stashed abroad.
Now, Representative John Delaney of Maryland is putting forward his ideas that would allow U.S. multinational corporations to repatriate earnings at a mandatory one-time tax of 8.75 percent instead and hopefully encourage corporations to bring their money home.
Taxes collected from the repatriation would then be used to establish an infrastructure bank to finance roads, transportation, water, and energy projects.
Delany is timing his proposal to coincide with the upcoming legislative session which will be addressing international tax reforms. By linking infrastructure funding to tax reform, Delany hopes to force the conversation about where the administration plans to get the $1 trillion to fund infrastructure rebuilding promises.
Read TheHill.com Dem Lawmaker Renews Push For Infrastructure, Tax Package here.