An often-noted example of Congress’ failure to pass meaningful legislation is its inability to provide any predictability to badly needed highway-construction funding across the country. The situation this month, with federal funding again about to expire at the end of July, is no better.
In recent years, the considerable shortfall between what the federal gas tax of 18.4 cents brings in and what is needed has been made up by special appropriations. There is no willingness to address the core of the issue, which is to raise the per-gallon tax, which because of fuel-efficient vehicles and constantly increasing construction costs has fallen far behind what is needed.
For both parties, the issue should be straightforward. Recognize that good highways are critical to the country, and ensure the Highway Users Tax goes toward improving highways and not into a general fund for who knows what other uses. Like other things in life, use less gasoline and you pay less tax.
If adding jobs is what is needed at the moment, and everyone agrees it is, highway construction does that nicely. More construction requires more contractors, and highway jobs are good-paying jobs.
Better roadways to move manufactured goods to market, workers to their jobs and shoppers’ to their stores, all at greater efficiency with less vehicle wear and tear, adds to the nation’s economy; those improvements can be tabulated.
Instead of moving on increasing the gas tax, members of Congress are focused on looking for revenue in other places. Most currently favored is to offer corporations that have profits overseas a lower than normal tax rate as an enticement to bring their profits home, and to use those tax revenue to fund highway work. It is estimated that some $2 trillion in corporate profits is held overseas untaxed.
But that funding technique would be mostly one-time, and not surprisingly create a flood of issues of its own. That tax relief would benefit the largest corporations, which small-business advocates would surely criticize. And for those who want to overhaul the nation’s tax code, which is desperately needed, that is not where they would start. They see reducing the tax on overseas profits as an important part of a package that would include numerous other tax changes, both increases and decreases. They would not give up that component now.
And then there are those who argue that corporations should not have to pay any U.S. taxes on their overseas profits; many countries do not require their corporations to do so.
The House of Representatives passed a bill last week that would continue highway funding through December, and the Senate will take up the issue this week. Senate leadership would like a two-year extension. Some political watchers believe the December date will give both bodies sufficient time to settle on changes to the corporate tax code, including how, or if, to tax overseas profits, in order to provide tax revenue for highways.
Count us as skeptics. Funding extensions have been a way of life in recent years as a “tax” has been too hot to handle. When it comes to highways, it is time to change that.
