WASHINGTON — House Ways and Means Chairman Paul Ryan is working on a "limited tax reform" package that could contain revenue for the Highway Trust Fund and extenders and that could be passed this summer.
"We see tax reform, full and comprehensive tax reform, as a 2017 project but a down payment on that project in 2015 is very possible, and it's also a part of fixing our international rules, financing the Highway Trust Fund," the Republican from Wisconsin said Thursday at a breakfast hosted by The Christian Science Monitor.
HTF money is used to reimburse states for surface transportation projects and can be used to back bonds called grant anticipation revenue vehicles, or Garvees. The HTF is funded primarily through motor fuel taxes, but has needed general fund transfers in the past several years in order to meet all of its obligations. The law authorizing spending from the HTF expires on May 31.
Ryan said he would like to use revenue from the repatriation of foreign earnings to fund a long-term transportation bill, but only if repatriation is part of permanent international tax reform. He said wants to see if Congress and the administration can reach an agreement on international reform.
If a tax-reform package that includes repatriation cannot be enacted this summer, then the Ways and Means committee will "go to plan B" for long-term transportation funding, Ryan said. Plan B is to come up with a package of "pay-fors" for a six-year highway bill, he said.
Meanwhile, Ryan and the other leaders on the tax-writing committees are starting to work on a short-term extension of the HTF. The plan is to do a $10 billion patch for the HTF that will keep the fund solvent through the end of the calendar year.
An HTF patch that goes through the end of the year is not needed for tax reasons since Ryan thinks a tax-reform package that includes money from repatriation for highway funding can be passed this summer. However, House Transportation and Infrastructure Committee chairman Bill Shuster, R-Pa., thinks a short-term extension should go until the end of the year "for road-construction planning reasons," Ryan said.
Ryan said Congress is not going to increase the gas tax. He also said that he does not support funding transportation through a repatriation holiday or a temporary period that is not part of permanent reform when companies can deem money to be repatriated. Doing that would cause companies to say "'I'm getting out of here. I'm inverting or I'm going to get taken over by a foreign company," Ryan said.
Sens. Rand Paul, R-Ky., and Barbara Boxer, D-Calif., have proposed legislation that would fund the HTF with revenue from a repatriation holiday But the Joint Committee on Taxation recently told Sen, Orrin Hatch, R-Utah, who also opposes a repatriation holiday, that the Senators' proposal would cost $117.9 billion from fiscal 2015 to fiscal 2025.
The House has been passing bills that make permanent some expired tax provisions known as extenders, including the deduction for state and local sales taxes. Ryan said that the Ways and Means Committee will likely approve more permanent extenders bills. If permanent extenders aren't enacted as part of a tax-reform package this summer, they should move as soon as possible in the fall, he said.
"My goal is to avoid what happened last year," Ryan said. In December 2014, Congress passed extenders legislation that only extended the tax provisions retroactively through the end of that year.
Ryan said that comprehensive tax reform cannot be enacted this year because of the stalemate between Congressional Republicans and the Obama administration. The Republicans are interested in lowering individual and corporate tax rates but the administration is not interested in individual tax reform. Even if Congress takes up limited tax reform that makes changes to tax rates, it will have to consider broadening the tax base, he said.
