By Carol E. Lee And John D. McKinnon
WASHINGTON--U.S. President Barack Obama will propose a $478
billion increase in funding for rebuilding American infrastructure
that would be paid for by levying a one-time tax on foreign
earnings from U.S. companies, a White House official said
Sunday.
In the proposal that will be outlined in Mr. Obama's fiscal 2016
budget on Monday, companies would be subject to a 14% tax on the up
to $2 trillion of overseas earnings they have already accumulated,
the official said. The money the new tax generates would be used to
expand the Highway Trust Fund's surface transportation
reauthorization from four years to six years, the White House
official said.
Mr. Obama is also proposing a 19% tax on all foreign earnings by
U.S. companies as they are accumulated, the official said. Under
the proposal, companies would then be able to reinvest those funds
in the U.S. without paying an additional tax.
"Unlike a voluntary repatriation holiday, which the president
opposes and which would lose revenue, the president's proposed
transition tax is a one-time, mandatory tax on previously untaxed
foreign earnings, regardless of whether the earnings are
repatriated," the official said. "This transition tax would mean
that companies have to pay U.S. tax right now on the $2 trillion
they already have overseas, rather than being able to delay paying
any U.S. tax indefinitely."
Write to Carol E. Lee at carol.lee@wsj.com and John D. McKinnon
at john.mckinnon@wsj.com