When it comes to corporate tax breaks one ordinarily thinks Republican and one would ordinarily be correct in doing so.
However, what if the corporate tax break was not part of the usual “trickle down economics” substanceless rhetoric but was actually applied directly to a specific undertaking that clearly benefited a particular community or communities?
That brings us to Democrat Congressman John Delaney of Maryland's 6th Congressional District.
Congressman Delaney has offered a plan to use corporate tax breaks in a manner that funds infrastructure development.
Congressman Delaney has stated that his plan “could create upwards of ten million construction, manufacturing and service jobs in ten years while also addressing some $3 trillion in infrastructure needs across the nation.”
According to Congressman Delaney, “rebuilding America’s infrastructure should be one of our top domestic priorities. Smart infrastructure investment is a triple bottom line for the country: 1) it boosts economic growth 2) creates good-paying jobs and 3) improves our quality of life."
Congressman Delaney has led the effort in the House to upgrade our roads, bridges, transit and water systems, airports and energy grid.
Few of us will dispute that locally, the need is great since I-81, I-270 and Metro all need major upgrades and improvements.
The Congressman is clear that “our aging infrastructure is a daily drain on the productivity of Marylanders, who are spending too much time commuting.”
After working on this issue for over four years, Congressman Delaney is convinced that the only way we can tackle this problem is to pair international tax reform with infrastructure.
This, he claims, addresses the single biggest obstacle – funding – while also solving a major problem in our tax code.
The Congressman further points out that “an estimated $2 trillion of U.S. corporate cash is overseas and companies do not repatriate their earnings back to the U.S.; they keep their profits abroad”.This, he makes clear, is “bad for the economy because it blocks economic activity here and it’s also bad for public services and our fiscal health, because its tax revenue that we don’t collect. This also encourages companies to invert and to move operations abroad."
Whether you are a conservative, a progressive or somewhere in the middle, you this is a concern.
The essence of the Congressman's plan is to lower the international tax rate but, most importantly, to direct some of that newly collected tax revenue to fund infrastructure development.
The critical element of the Congressman's plan is the creation of the American Infrastructure Fund which would be funded by this tax revenue from the collection of the corporate taxes we are not currently collecting.
This revenue would provide financing to state and local projects and, in so doing, encourage the expansion of public-private partnerships.
The expansion of public-private partnerships is critical to the plan's success because, as the Congressman continually points out, overly relying on private capital, as the Trump infrastructure plan does, “will prove to be insufficient an inadequate.”
“It’s a triple bottom line for our country” according to the Congressman: “a better tax code, more domestic investment and the jobs and growth created by more infrastructure investment.”
The Congressman's plan has received bipartisan support with over 40 Democrats and 40 Republicans cosponsoring the proposed infrastructure legislation over the last several years.
The issue now is whether having a Republican controlled Congress and a Republican White House will open up a door that might actually enable Congressman Delaney to make his vision on infrastructure development attractive to those in power since it includes both infrastructure development and tax incentives?
With a Republican controlled federal government and a plutocrat in the White House, corporate tax breaks will be a top priority. Finding a way to ensure that these tax incentives result in tangible benefits to the rest of us should be a requirement for any tax incentives and Congressman Delaney's vision seems to incorporate that concept.
In the post 2008 recession our economy can no longer tolerate “trickle down” concepts without actual substance.
The extent to which Congressman Delaney's tax plan would achieve the goal of tying tax incentives to specific projects that benefit the general population is certainly subject to debate, but if he is able to gain some traction in the current political environment and achieve any progress in rebuilding our decaying infrastructure then hats off to him.