Akron Beacon Journal: Sherrod Brown, tax reform and the Highway Trust Fund


Akron Beacon Journal: Sherrod Brown, tax reform and the Highway Trust Fund

The dysfunction among House Republicans goes far beyond the selection of a replacement for Speaker John Boehner. It stirs in the threat of a government shutdown, in the risk of failing to raise the debt ceiling, in missing the opportunity for immigration reform. It may be most obvious in Congress resorting repeatedly to temporary and inadequate measures for extending the Highway Trust Fund.

The likelihood is, lawmakers will take that sorry path again. They will do so despite bipartisan efforts to bring continuity and stability to the fund. U.S. Rep. Jim Renacci, a Wadsworth Republican, has a promising proposal to link the federal gas tax to inflation, sustaining the fund for a decade. Unfortunately, too many in his own party won’t support anything that remotely has the appearance of a tax increase.

Now U.S. Sen. Sherrod Brown of Ohio has stepped forward, along with his Democratic colleagues, Charles Schumer of New York and Mark Warner of Virginia, plus Paul Ryan of Wisconsin, the chairman of the House Ways and Means Committee, to explore a possible compromise. Actually, they have in mind addressing two problems, the shortfall in transportation money and flaws in the way corporations are taxed for profits earned overseas.

In short, make fixes to the latter, and funds would arrive for transportation needs. Both Democrats and Republicans would advance items on their agendas.

Brown outlined the approach in a speech to the Cleveland City Club on Friday. The corporate tax system currently is a fright, with its many loopholes and higher rates. American companies have parked roughly $2 trillion overseas. What the plan would do is create incentives to end tax havens. Companies would pay taxes in the countries where the profits are earned. If a firm merely is using a foreign base to avoid taxes, then it would owe what is called a country-to-country minimum tax, or a worthy tool to discourage schemes for tax avoidance.

The idea would move the American tax system in the direction of other countries. It also would set the table for returning that $2 trillion. The sum would be hit with a onetime tax to generate enough money to support the Highway Trust Fund for six years.

Some lawmakers caution that such repair work to the tax system should be part of comprehensive tax reform. Yet that course seems a pipe dream for now, along with the responsible step of raising the gas tax. What should not be tolerated is another half-measure, the country, as Sherrod Brown noted, currently ranking just 16th in the world for the quality of its public works.

A steady, adequate flow of investment is needed. Brown and his colleagues have a way to gain six years of welcome certainty, with a helpful advance on tax reform added to the mix.

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