updated 12:27 pm EDT, Wed June 11, 2014
Money could be put towards transportation projects
Both Democrats and Republicans in the US Senate are considering going through with a possible tax "holiday" for repatriated corporate profits, Reuters reports. Senate Minority Leader Mitch McConnell has told reporters that the idea "enjoys a good deal of support" among Republicans; a spokesman for another party Senator, Rand Paul, says that Paul has been talking with Democratic Senate Majority Leader Harry Reid about legislation.
A number of multinational corporations, such as Apple, have lobbied for a tax holiday on the premise that the normal 35 percent tax rate on repatriated cash would wipe out millions or billions of dollars from their reserves. Instead those businesses are leaving the money unspent in foreign accounts.
Political supporters of the holiday suggest that even with a reduced tax rate, the repatriated cash could help fuel the federal Highway Trust Fund, which is used to build and maintain infrastructure but due to run out of money by the end of August.
The chairman of the Senate Finance Committee, Democratic Ron Wyden, comments that "nothing has been agreed to" but that "nothing has been ruled out." He adds that "one new aspect" to the situation is an April announcement by eBay, in which it said it would go ahead and repatriate cash anyway to put towards US projects. It paid out $3 billion in taxes. "Those folks brought their money back without any tax break," says Wyden. "What are the implications for that in this debate?"
A Republican tax lobbyist says that an idea being floated is the idea of reviving the 5.25 percent tax rate used during a 2004 holiday, but with some caps on interest deductions that might improve the amount of taxes collected.