WASHINGTON, DC — Today, Ways and Means Select Revenue Measures Subcommittee Chairman Dave Reichert (R-WA) delivered the following opening statement during a hearing on the taxation of the repatriation of foreign earnings as a funding mechanism for a multi-year highway bill.
“Today, we have the opportunity to follow up on last week’s hearing where we discussed long-term funding solutions to the Highway Trust Fund. Like many of my colleagues, I too believe we should secure a long-term, stable funding source, but we need time to develop a solution. As we continue these conversations on both sides of the Capitol, it is hard to ignore a topic often tied to these discussions—the repatriation of overseas earnings as a source of funding for a multi-year highway bill.
“However, as you will hear today, current repatriation proposals are not that simple nor are they without serious policy implications. That is why we are having this hearing—to drill down on what people mean when they say repatriation and how the different forms of repatriation work. A key, but often overlooked, part of this is that repatriation includes taxing earnings that have been reinvested abroad.
“What we know to be true is that repatriation cannot be done as a standalone; it must be part of a transition to a more competitive system. I expect to hear today that, taken outside of the context of a transition, mandatory repatriation would be a tax increase. A tax increase that American companies would be forced to pay unlike their foreign competitors.
“Therefore, this hearing also provides a chance to talk about our current international tax system and how it should be modernized to boost the competitiveness of American companies. This is timely, because outside of our discussions, the OECD BEPS project is moving forward and impacting the decisions of American companies operating globally.
“Thank you to our witnesses and I look forward to hearing from you about the key differences between current repatriation proposals.”