The transition team of Democratic presidential candidate Hillary Clinton appears to be planning to make repatriation and infrastructure legislation the first priority if Clinton wins the presidency.
The Clinton team aims to try to work with Republicans for an immediate bipartisan legislative achievement in an area where Republicans and Democrats have shown some common ground. The legislation would generally be designed to shift to a territorial tax system after imposing a one-time tax at a reduced rate on past unrepatriated earnings. The revenue from the repatriation would be used to fund infrastructure. Additional international or business tax reform could also be included.
The idea does have some precedent. Both the Obama administration and House Speaker Paul Ryan, R-Wis., last year pushed for international tax reform and a repatriation tax as a mechanism for highway funding. Senate Finance Committee Members Chuck Schumer, D-N.Y., and Rob Portman, R-Ohio, supported the effort, creating a bipartisan set of international reform principles as a framework for reform. Schumer and Treasury Secretary Jack Lew have each recently suggested revisiting in the issue in early 2017, and Schumer is likely to be the top Senate Democrat in the next Congress.
Even if Clinton wins, there would be some obstacles to the effort. Senate Republicans generally opposed the idea in 2015, saying that any revenue from tax changes should be spent on tax cuts, not spending increases. Ryan may also be reluctant to commit more spending to infrastructure after Congress recently extended highway funding through 2022. And the details for international reform are harder to agree on than the general goals. Schumer and Portman worked for months without being able to reach a consensus on the rates for the one-time repatriation tax or a new dividend exemption.
The Trump campaign is less focused on the immediate transition, and his top tax priorities if elected could depend heavily on whether Republicans retain the Senate.
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