Today, Senators Barbara Boxer (D-CA) and Rand Paul (R-KY) announced they plan to introduce the Invest in Transportation Act of 2015. Subject to certain limitations, the proposed bill would set the tax rate at 6.5% for excess repatriation of pre-2016 earnings above a company’s average repatriations in recent years. Companies would have up to five years to complete the repatriation.
The proposal states that the bill would ensure that a portion of repatriated funds will be used for increased hiring, wages, and pensions; R&D; environmental improvements; public-private partnerships; capital improvements; and acquisitions. The proposal further states that repatriated funds cannot be spent on increases in executive compensation or on increases in shareholder dividends or stock buybacks for three years after the program ends. Finally, companies that invert within 10 years of participating in this program must repay the tax incentive with interest.
Under the proposal, all tax revenues from the repatriation program would be used to extend the Highway Trust Fund.