Democratic Rep. John Delaney of Maryland has introduced a bill to address America’s crumbling infrastructure—and it doesn’t cost taxpayers anything. Instead, money would be raised through the sale of special bonds to companies earning profits abroad.
But these bonds are unique—they aren’t guaranteed by the government and they have very low interest rates. Buying these bonds would allow companies to bring earnings back to the U.S. from their overseas earnings tax free.
With U.S. based companies earning $1.9 trillion abroad last year, these bonds could be an attractive and legal way for firms to reduce their tax bills.
Just last week, a bridge in Washington state collapsed plunging three people into the water below. This is just one example of the sad state of the U.S. infrastructure system, which recently received a D+ grade from the 2013 Report Card for America’s Infrastructure. The American Society of Civil Engineers reports that an estimated $3.6 trillion investment is needed by 2020.
On Wednesday’s The Daily Rundown, Delaney said that his bill “could finance up to $750 billion worth of infrastructure projects in the United States.”
“This is a quintessential innovative financing vehicle,” Delaney said. “This will be another, fairly large, robust tool in the toolkit.”
Delaney, a member of the Financial Services Committee and the only former CEO of a privately traded company in Congress, said he recognizes the need for an overhaul of the U.S. tax system.
“We need comprehensive tax reform. Right now our tax system creates all of these unintended consequences,” he said. “In the meantime, while we’re dealing with massive comprehensive tax reform which is really important for us to do as a country, I think we should start getting that money to work in the United States. And that is what our bill is designed to do.”