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GOP senator backs plan to tax corporate profits for roads

GOP senator backs plan to tax corporate profits for roads
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Sen. Cory GardnerCory GardnerHillicon Valley: Trump fires top federal cybersecurity official, GOP senators push back | Apple to pay 3 million to resolve fight over batteries | Los Angeles Police ban use of third-party facial recognition software Senate passes bill to secure internet-connected devices against cyber vulnerabilities Democrats vent to Schumer over Senate majority failure MORE (R-Colo.) is co-sponsoring legislation to tax up to $2 trillion in corporate revenue that is currently stored in foreign banks to pay for domestic infrastructure projects. 

The measure, which is sponsored by Sens. Rand Paul (R-Ky.) and Barbara Boxer (D-Calif.), would offer companies a 6.5 percent tax rate on profits they return voluntarily to the U.S. to boost federal transportation funding that is currently scheduled to expire on May 31. 

Gardner said the plan, known as repatriation, is the most viable solution to preventing an interruption in the federal government's transportation spending. 

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“Extending the Highway Trust Fund is of critical importance for all Coloradans, and is a bipartisan priority,” he said in a statement. “Providing much-needed additions to this critical fund through a repatriation program is a vastly superior solution than imposing additional taxes on Coloradans. This bill would bring money currently held abroad back into our economy, while funding the key transportation investments our communities and businesses need to move forward.”

The Department of Transportation has said it will have to begin cutting back on payments to state governments for construction projects that are already underway in late July or early August if Congress does not reach a deal to extend the infrastructure funding. 

Lawmakers in both parties have expressed a desire to prevent such an interruption in the road and transit spending, but they have been struggling to come up with a way to pay for an extension.

The traditional source of transportation funding has been revenue that is collected by the 18.4 cents-per-gallon federal gas tax. The tax has not been increased since 1993, however, and its buying power has been sapped by improvements in car fuel efficiency in recent years. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in $34 billion. 

Lawmakers have turned to other areas of the federal budget to close the $16 billion gap in infrastructure funding in recent years, but transportation advocates have complained the temporary patches are making it too difficult for state and local governments to plan long-term construction projects. 

Transportation advocates have suggested that raising the tax or at least indexing it to inflation would be the easiest way to close the infrastructure funding shortfall, but lawmakers have been reluctant to ask drivers to pay more at the pump. 

Gardner said the repatriation plan he is now co-sponsor would provide more than enough money to replenish the transportation department's Highway Trust Fund without raising the gas tax.

Critics have assailed the repatriation plan, citing a Joint Committee on Taxation (JCT) study that found it would the federal government more in the long run than it brings in for transportation projects.  

The nonpartisan JCT has said that a tax holiday would generate about $20 billion in revenue initially. The analysis said the plan would ultimately cost the federal government about $96 billion, as companies would have more incentive to keep their profits abroad and wait for another tax holiday.

-This story was updated with new information at 5:17 p.m.