The Wall Street Journal: Obama to propose tax on firms’ foreign earnings
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 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.
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.
Companies often pay little or no U.S. tax on their foreign profits now, because the U.S. allows them to defer that tax until the money is brought home. They can further offset their U.S. tax with credits for foreign tax paid.
An expanded version of this report appears at WSJ.com