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Here’s One Thing Republicans & Democrats Can
Agree On: Stand-Alone Repatriation Is A Bad Idea
Republicans & Democrats agree. Using stand-alone repatriation to pay for projects unrelated
to tax reform is bad policy with a poor track record.
“The experience in 2004 with a one-time voluntary
repatriation holiday wasn’t very good,’ he said. ‘We
didn’t see the reinvestment.’ Academic research
shows companies mostly used the previous holiday to buy
back their own stock or for dividends, not for promised
investments. (Brian Fraler, “Tax holiday to fund highway bill no silver bullet,”
Politico Pro, 2/5/15)
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Treasury Secretary Jack Lew
“Taking that money for highways could set back the cause of business tax reform for a long time,
warns Sen. Chuck Grassley (R-Iowa), a Republican on the Finance panel. ‘We have tax reform every 25
years — you’re making a decision that could affect investment in this country for the next 25 years,’ he said.
‘If you look at the long term, we’re going to be better off having tax reform, so that we’re competitive’
rather than ‘spending that money right now.’” (Brian Fraler, “Tax holiday to fund highway bill no silver bullet,” Politico Pro,
2/5/15)
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Recently, Sen. Jim Inhofe (R-OK) made the argument that proposals to fund infrastructure with repatriated
corporate earnings “[is] not going to solve the problem.’” (Heather Caygle, “Repatriation Takes One Step Forward, Another
Back,” Politico Pro, 1/29/15)
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“What’s more, when lawmakers give companies tax holidays — like one in 2004 — they are teaching
businesses to expect yet another someday. That encourages corporations to leave even more money
abroad, in hopes that it too will someday benefit from a fire tax sale, which further cuts into future receipts,
according to the Joint Committee on Taxation. The result? A tax holiday similar to the one offered in
2004 would generate $20 billion over the first couple years, but then lose a lot more in subsequent
years.” (Brian Fraler, “Tax holiday to fund highway bill no silver bullet,” Politico Pro, 2/5/15)
– The Joint Committee on Taxation
“Senate Finance Chairman Sen. Orrin Hatch (R-Utah) has also repeatedly
said he doesn’t like the idea of a standalone repatriation bill, saying the
proposal should be included in a broader tax code rewrite. On Thursday,
Hatch dismissed standalone proposals to use repatriation to pay for
infrastructure, saying, ‘I think we can do it without that, and secondly, that’s
not what we should do with repatriation.’” (Heather Caygle, “Repatriation Takes One Step
Forward, Another Back,” Politico Pro, 1/29/15)
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“So a one-time repatriation of the type some have talked about really doesn’t provide a good source for
transportation or anything else. It is a revenue loser, not a revenue gainer, unless you do it as you
recommend as a part of comprehensive business tax reform.” (CQ Congressional Transcripts (Subscription Only), U.S.
House Committee On Ways And Means, Hearing On The President’s FY2016 Budget Proposal, Washington, D.C., 2/3/15)
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Rep. Lloyd Doggett (D-TX)
“One-off repatriation won’t work. And even if you do something similar to what we did in our draft last
year, where you allow for repatriation to cover highway spending, that’s still not a permanent solution
beyond another six-year highway bill.” (“Talk of Short-Term Patch Begins,” Politico Pro, 2/5/15)
– Rep. Charles Boustany (R-LA)
“The president will also propose a one-time 14 percent tax rate for
companies that bring profits home from overseas, with much of the
proceeds going to fund infrastructure, like roads, bridges and
airports. But that ‘repatriation holiday’ would have to be part of
a broader overhaul of the business tax code.” (Jonathan Weisman,
“Obama’s Plans For Deficit And Taxes Are Detailed On Eve On Budget Proposal,” The New
York Times, 2/2/15)
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Rep. Paul Ryan (R-WI)
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“‘We don’t think it’s going to work,’ said Rep. Dave Reichert, chairman of the Ways and Means revenue
subcommittee. Senate Finance Chairman Orrin Hatch also opposes using repatriation for highway funding.
Even if the tax-writing committees were on board, many concede it’s too heavy a lift to push through
Congress before the May deadline.” (“Talk of Short-Term Patch Begins,” Politico Pro, 2/5/15)
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“‘Changes to our tax code just to fund more spending by our already bloated government is not the way to
boost our economy and encourage job creation,’ Rep. Pat Tiberi (R., Ohio) said in a statement.” (Nick Timiraos
and John D. McKinnon, “Obama Proposes One-Time 14% Tax On Overseas Earnings,” The Wall Street Journal, 2/2/15)