TAX POLICY:

Camp proposal would fund transportation, waterways infrastructure

As part of his plan to overhaul the tax code, Rep. Dave Camp (R-Mich.) has found some money to pay for repairs to roads, bridges and transit systems -- without increasing the gas tax. And he is proposing increasing fuel taxes on barge operators to pay for infrastructure improvements to their waterways.

Camp, who leads the House Ways and Means Committee, said early on that he was not interested in using tax reform to increase the 18.4-cent-per-gallon gasoline tax, which feeds the Highway Trust Fund but has not been increased since 1993. Instead, Camp would take some of the revenue generated through a one-time tax on certain corporate earnings and profits held by foreign subsidiaries.

The proposal would raise $126.5 billion over 10 years, according to a Joint Committee on Taxation evaluation of the proposal. Camp said that would be enough to fully fund authorized highway and infrastructure investments paid for by the fund for the next eight years.

The tax proposal came the same day President Obama unveiled his own separate proposal to increase transportation spending over the next four years (Greenwire, Feb. 26).

Both efforts were praised by those working to avoid the looming potential of the highway trust fund going bankrupt.

"Chairman Camp and President Obama have presented proposals that I hope will bring increased focus to the challenges facing the Highway Trust Fund and the importance of the federal role in our national transportation system," House Transportation and Infrastructure Chairman Bill Schuster (R-Pa.) said in a statement.

Also included in Camp's plan is a 6-cent increase in the current 20-cent-a-gallon fuel tax that barge operators pay. The industry has been pushing for that tax hike, since revenue from the tax goes into the Inland Waterways Trust Fund, which splits the cost of new lock and dam projects and major repairs with federal taxpayers.

The trust fund has been living hand-to-mouth with the fuel tax not having budged in two decades, causing a backlog in lock and dam projects at the Army Corps of Engineers. More than half of the nation's locks are more than 50 years old and have exceeded their design lives.

"As our nation looks to increase exports, create jobs and facilitate American competitiveness, transportation infrastructure requires investment," said Mike Toohey, president and CEO of the industry group Waterways Council Inc. "An increased user fee, paid for and supported by the inland waterways industry, will serve to raise the level of investment in our inland waterways transportation system."

Barge interests had been pressing for the tax increase in combination with other reforms for years, but Camp's proposal is the first time it's been embraced by a major player in the budget process. According to the Joint Committee on Taxation, the tax hike would raise an additional $200 million over the next decade.

But not everyone agrees that a 6-cent-per-gallon increase will do the trick. The Obama administration and spending watchdog groups say that under the current scheme, shippers enjoy a 92 percent subsidy. The administration has instead proposed raising vessel fees to a level that would generate an additional $1 billion over the next decade (Greenwire, Oct. 3, 2011).

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