There is no real argument over whether the nation needs to do more to improve its infrastructure — its transportation, water, power and information networks. But there is an argument over how best to pay for it all — and that argument is increasingly turning in a dangerous direction.
Financially stressed working-class households who are at best treading water, if not actually sinking, in today’s economy aren’t eager to dig deeper into their own pockets to foot the bill. That’s even more true of the plutocrat class, which has an army of lobbyists at the ready to shut down any suggestion that those who arguably would benefit the most from such things as better roads and public transportation should shoulder the larger share of the load.
Politicians of both parties in Washington are therefore increasingly relying on one of the schemes in the voodoo economics toolbox: give corporations hoarding money overseas to avoid taxation a form of tax holiday in exchange for increased corporate funding for infrastructure.
The Bond Buyer financial news site reports that Sen. Rand Paul (R-Texas) and Sen. Barbara Boxer (D-Calif.) are close to agreeing on a plan that would give multinationals a deep tax reduction on money they currently have stashed overseas if they bring the money back into the United States, also known as repatriation. Money collected would be deposited into the Highway Trust Fund, which is dedicated to paying for federal transportation projects.
Paul’s promoting of this idea is not new; he had a bill last year that would have permanently cut the tax rate on profits corporations hold overseas, with the funds going into an emergency fund for what it considered high-priority highway projects. But his collaboration with Boxer is likely to give the idea more political momentum.