Negotiations between House Ways and Means Committee Chairman Paul Ryan, R-Wis., and Sen. Charles E. Schumer, D-N.Y., over using international tax reform as a means to pay for a long-term highway bill have reached a standstill, according to aides for both lawmakers. The deadline for funding the highway bill is October 29 and the two remain at odds over how much funding derived from revamping the international tax code would go toward making solvent the Highway Trust Fund.
According to an aide for Ryan, the House Transportation and Infrastructure Committee has been advised to move forward with its own transportation bill, which would not include funds from reforming the international tax code. He said the two lawmakers will continue their discussions with the hope of reaching agreement on an international tax reform and long-term highway bill. Ryan has said he does not expect to accomplish complete reform of the tax code as it pertains to international issues. Instead, Ryan has indicated that he hopes to pass a narrow reform of U.S. international taxation and attempt a more complete reform during the next presidency.
According to an aide for Schumer, the senator is pushing for a deal that would allot a large portion of the funds derived from international tax reform toward highway and infrastructure development. Schumer and Sen. Rob Portman, R-Ohio, were co-chairs of the international tax reform working group initiated by Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, and ranking member Ron Wyden, D-Ore. (TAXDAY, 2015/07/09, C.1). Some of the ideas proposed include transitioning to a hybrid, territorial-like system, innovation boxes, base erosion and deemed repatriation.
The likelihood of striking a deal and getting it through the Senate before the end of October may be difficult, according to Hatch. He has sided with Senate Majority Leader Mitch McConnell, R-Ky., on pushing for the House to consider the Senate-passed version of the highway bill, the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Bill of 2015 (HR 22), which would fund the Highway Trust Fund for six years. The Senate’s highway bill would derive funding for the first three years with revenue from tax-compliance measures and revenue for the remaining three years to be determined by the next Congress (TAXDAY, 2015/07/31, C.1).
By Jeff Carlson, Wolters Kluwer News Staff