U.S. Senate Majority Leader Harry Reid, D-Nev., and Sen. Rand Paul, R-Ky., are still working out the details of a plan to replenish highway funding with repatriated corporate earnings, and the Senate's top taxwriters still have to sign on to the idea for it to advance, a Reid aide told Tax Analysts June 11.
The aide said Reid's proposal for a one-year repatriation holiday with a rate of 9.5 percent is not a final product but rather a basis for ongoing negotiations. "We are building this airplane while we try to fly it," the aide said.
Paul told reporters early June 11 that he had not seen the 9.5 percent, one-year proposal, but said he saw room for compromise between Reid's proposal and his own preference for a permanent, 5 percent tax on repatriated earnings. Reid's aide said that "discussions on the details are still happening at the staff level."
Paul nevertheless maintained optimism about partnering with Reid. "Our proposal is gaining momentum," he said. "The proposal doesn't have absolute parameters, and it's going to take a compromise."
Paul expressed reservations about Reid's proposed time frame. "One year really is not as good because people do stuff over many years," he said. "Companies can't get ready to even do stuff in one year. None of the companies want one year."
Paul said the repatriation holiday idea drew a lot of interest at the June 10 Senate Republican and Democratic caucus luncheons. "I'm talking to House leaders now, and I'm getting mostly positive feedback over there, too, because there's an enormous deficit in the transportation fund," he said. "This brought in $32 billion in one year in 2004."
House Ways and Means Committee Chair Dave Camp, R-Mich., said June 11 that he and Paul had discussed the repatriation proposal.
Reid and Paul discussed their proposal with Senate Finance Committee Chair Ron Wyden, D-Ore., and Finance Committee ranking minority member Orrin G. Hatch, R-Utah, the week of June 1, Reid's aide said. Hatch's reaction was hostile: "He wants to kill it," the aide said. Hatch told reporters June 11 that he would rule out repatriation if he could.
Wyden was circumspect about the plan, the aide said, adding, "We are not going to push it over the objections of Wyden, but if there is renewed interest, we are happy to help."
That echoed Reid's previous statement that Wyden is the ultimate decision-maker, but Wyden said June 11 that "absolutely no decisions have been made."
"That's simply inaccurate," Wyden said after being asked about the apparent reversal. In the interest of fostering an open highway funding discussion among Finance Committee members, "I have not said yea or nay to any of the options," he said.
But Wyden has also offered some hints about his personal feelings on repatriation. When speaking about the issue recently, he has referenced eBay's decision in April to take a $3 billion tax hit in order to repatriate $9 billion in profits.
"When repatriation is discussed, I believe this new development, which is just weeks old, would be a factor in the debate," Wyden told Tax Analysts June 11, adding that eBay saw an economic interest in repatriation without a tax incentive. "And guess what? I believe in markets," he said.
Lindsey McPherson contributed to this article.
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