Delaney: After Health Care Debacle President Trump Should Scrap Border Adjustment Tax and Push for Pro-Growth Infrastructure Tax Reform Deal

WASHINGTON - Following the Republicans' failure to keep their core campaign promise to repeal the Affordable Care Act and take away the health care coverage of 24 million people, Congressman John K. Delaney (MD-6) calls upon President Trump to avoid another policy debacle and focus on policies that actually benefit the United States and grow the economy.

Congressman Delaney calls upon President Trump to denounce Speaker Ryan's border adjustment tax and work with both parties on an infrastructure package funded by international tax reform. This week, Congressman Delaney reintroduced bipartisan legislation to use repatriation to rebuild America.

"President Trump should learn from this health care debacle and chart a new strategy that's based on good policy, not keeping empty campaign promises. He should denounce the anti-growth border adjustment tax and start working with a bipartisan coalition on a real infrastructure deal," said Congressman Delaney. "If Trump doesn't reject the border adjustment tax and other pet projects from congressional leadership, any positive pieces of his agenda will drown in the swamp."

Congressman Delaney and Congressman Rodney Davis (IL-13) have introduced the Partnership to Build America Act, legislation that creates a new American Infrastructure Fund (AIF) to finance state and local infrastructure projects. The AIF is capitalized through a one-time bond sale to U.S. corporations looking to repatriate a portion of their international earnings. Congressman Delaney and Congressman Ted Yoho (FL-3) have filed the Infrastructure 2.0 Act, which creates both the American Infrastructure Fund and provides additional revenues to expand the Highway Trust Fund using more comprehensive international tax reform. Congressman Delaney first introduced this framework - combining international tax reform and increased infrastructure investment in 2013.

The Partnership to Build America Act - Filed by Rep. Delaney, Rep. Davis Lead Cosponsor

The American Infrastructure Fund

* The Partnership to Build America Act creates the American Infrastructure Fund (AIF) to provide financing to state and local governments for new infrastructure.

* Transportation, energy, communications, water and education projects are eligible to receive AIF financing. Local governments would apply directly to the AIF for support.

* To encourage public-private partnerships 35% of AIF supported projects must have at least 10% of their financing be private debt or equity.

* The AIF will be capitalized by $50 billion in infrastructure bond sales and leveraged at a 15:1 ratio to provide up to $750 billion in loans or guarantees.

Funded by an Infrastructure Bond Sale

* Rather than using appropriated funds out of the federal budget to establish the American Infrastructure Fund, the Partnership to Build America Act uses a bond sale.

* AIF bonds would have a 50-year term, pay a 1% fixed rate return and would not be guaranteed by the U.S. government. These bonds are not intended to be a good investment on their own and are transferable after purchase.

* To incentivize companies to purchase these bonds, U.S. companies would be allowed to repatriate a certain amount of their overseas earnings tax free for every $1.00 they invest in the bonds. This multiplier will be set by a "reverse Dutch auction" - which allows the market to set the rate, ensuring that enough funds are raised.

* Assuming a 1:4 ratio is set by the auction; a company will be able to repatriate $4.00 tax-free for every $1 in AIF bonds they purchase.

The Infrastructure 2.0 Act - Filed by Rep. Delaney, Rep. Yoho Lead Cosponsor

Building a World Class 21st Century Infrastructure with Revenue from Deemed Repatriation at 8.75% Tax Rate

* Under the Infrastructure 2.0 Act, existing overseas profits accumulated by U.S. multi-national corporations would be subject to a mandatory, one-time 8.75% tax, replacing deferral option and current rate of 35%.

* $120 billion to the Highway Trust Fund, enough to meet funding gap at increased levels for six years.

* $50 billion to capitalize the American Infrastructure Fund (AIF)

* $25 million pilot program to create regional infrastructure accelerators, similar to the West Coast Infrastructure Exchange

* This frees the estimated $2 trillion in overseas earnings to return to the United States, spurring private sector re-investment and growth.

Creating Long-term Highway Trust Fund Solvency and Policy Certainty

* The Infrastructure 2.0 Act provides six years of Highway Trust Fund solvency, providing immediate certainty to the private sector and policymakers.

* The legislation also establishes a bipartisan and bicameral commission that is tasked with developing a solution for permanent solvency of the Highway Trust Fund.

Building a Path for Broader Tax Reform

* The Infrastructure 2.0 Act creates an eighteen-month deadline for international tax reform.

* To encourage action, the legislation includes a forcing function: if reform is not enacted, a fallback international tax package to make U.S. business climate more competitive would be implemented.

* This pro-growth fallback reform package would end deferral, reduce anti-competitive over taxation, decrease taxes for companies paying fair rates abroad but increase taxes for companies in tax havens. This would eliminate the lock-out effect and allow for the free flow of profits back to the United States.

* Under this option, for Active Market Foreign Income, a company would pay a 12.25% tax to the U.S. on overseas profits if they are currently paying no tax and a 2% tax to the U.S. if they are already paying the OECD average of 25% abroad, with a sliding scale in-between.

Read this original document at: http://delaney.house.gov/news/press-releases/delaney-after-health-care-debacle-president-trump-should-scrap-border-adjustment