James F. McDonough
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732-568-8360 jmcdonough@sh-law.comFirm Insights
Federal Business Tax Overhaul Could Fund Infrastructure Projects
Author: James F. McDonough
Date: March 11, 2014
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President Barack Obama recently announced a four-year, $302 billion transportation bill to repair the nation’s aging roads, rails, bridges and tunnels. According to The New York Times, one method Obama plans to use to fund this initiative is a business tax overhaul.
In the State of the Union Address, Obama said he would use the money from the tax changes to “create jobs rebuilding our roads, upgrading our ports, unclogging our commutes, because in today’s global economy, first-class jobs gravitate to first-class infrastructure.”
The proposal would help avoid repeated short-term extensions that many construction projects have experienced in recent years, and would help protect 700,000 jobs, according to USA Today.
Changes to b that would help fund the infrastructure projects would include closing tax loopholes, lowering tax rates and making the corporate tax system more fair, the Department of Transportation said.
Some businesses may not be happy with the government closing tax loopholes, as this could mean they have higher tax bills. However, lowering rates could help ease the pain of this move.
Raising the gas tax was also explored, but Obama believes the corporate tax overhaul should be enough to fund the projects. The gas tax currently sits at 18.4 cents per gallon, and hasn’t been increased since 1993. This brings in about $39 billion annually, which, alone, isn’t enough to fund infrastructure projects.
One of the biggest benefits that could be experienced by this move is the protection of jobs. The White House said more than 700,000 jobs could be put in jeopardy is these projects aren’t properly funded.
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