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Infrastructure takes center stage in House

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Tax Hot Topics newsletter House Democrats unveiled a plan to invest $760 billion in infrastructure improvements over the next five years but are still discussing how to pay for it.

Infrastructure enjoys strong bipartisan support, but Republicans and Democrats are bitterly divided on how to address the issue, particularly when it comes to covering its staggering cost.

House Ways and Means Committee Chair Richard Neal (D-Mass.) discussed funding at a recent hearing, releasing a list of potential financing tools that called for implementing “user-based” mechanisms, reinstating the Superfund tax and leveraging tax-favored bonds and tax credits. Democrats deliberately avoided any discussion of raising taxes to protect the proposal from being saddled by opposition from the outset.

Republicans nonetheless lambasted any efforts to increase taxes, arguing that doing so would undo recent economic gains. Ranking Minority Member Kevin Brady (R-Tex.) instead called for empowering local governments and developing creative solutions to raise private capital, such as opportunity zones for infrastructure or allowing real estate investment trusts to invest in infrastructure.

Still, Neal indicated the Trump administration is supportive of comprehensive infrastructure legislation. He called on business and labor groups that support increasing the gas tax to be more vocal and help provide political cover.

With the White House and key constituent groups on board, infrastructure legislation could pick up traction. But the substantial political and policy difference may make it unlikely in an election year.

Contacts:
Dustin Stamper
Managing Director
Washington National Tax Office
T +1 202 861 4144

Omair Taher
Senior Associate
Washington National Tax Office
T +1 202 861 4143

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