Business lobby opposes tax holiday for highway plan

A top corporate lobby is urging lawmakers to stay away from a corporate tax holiday when they try to shore up the Highway Trust Fund.

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The Business Roundtable, which represents corporate chief executives, said it was particularly opposed to a tax holiday if it was paired with tax increases elsewhere, like taking away the deduction for interest on debt currently enjoyed by companies.

Such a move, the Roundtable said, would make it even harder to overhaul the tax reform, an issue where lawmakers have struggled to spur momentum for years.

“Any such limitation on interest deductions would raise the cost of financing new investment for American companies, and thereby disadvantage American companies relative to their foreign-based competitors,” John Engler, the Roundtable’s president, wrote to top congressional tax writers.

“Further, any business tax increase outside of tax reform would reduce the ability to achieve revenue-neutral and permanent comprehensive tax reform to improve the competitiveness of the U.S. economy.”

Lawmakers in both chambers and both parties are struggling to find ways to shore up the highway trust fund, which could run out of money in weeks without congressional action.

House Republicans had pushed to use savings from ending six-day mail delivery to give the trust fund an infusion of revenue, but lobbyists say that idea was dropped after Majority Leader Eric Cantor (R-Va.) lost his primary last week.

Senate Finance Committee members have said they’re looking for ways to at least keep the trust fund going until after November’s elections.

Senate Majority Leader Harry Reid (D-Nev.) had floated the idea of using a corporate tax holiday to help stave off bankruptcy for the trust fund. The White House said Wednesday that it didn’t support such a plan.

It would allow corporations to bring back offshore profits, called repatriation, at a temporary tax rate well below the current top rate of 35 percent.

The Joint Committee on Taxation has said that a holiday like the one enacted a decade ago would cost the government tens of billions of dollars over a decade.

But Reid, who discussed the idea with Sen. Rand Paul (R-Ky.), would have structured the plan to raise $3 billion over 10 years.