Congress Taxes

Grover Norquist Tells Republicans Not to Fund the Highway System

Written by SK Ashby

While congressional Democrats have sought to either raise the gas tax or impose taxes on overseas profits to fund the federal highway system, congressional Republicans have proposed that we implement a voluntary tax on repatriated profits to fund the highway system.

I've already explained why that's a very bad idea, but it may not matter, however, if anti-tax inquisitor Grover Norquist has anything to say about it.

According to Norquist, a voluntary tax on repatriated profits would violate his tax pledge.

To put it another way, Norquist has ruled out the only avenue for funding that congressional Republicans have left open.

Whether or not Norquist has as much influence over congressional Republicans as he did in previous years is debatable, but I think it would be a mistake to categorically discount his influence.

Regarding Norquist's declaration itself, it doesn't make any sense. As I've explained before, the GOP's tax on repatriated profits would be entirely voluntary because there is no mechanism that would oblige companies to repatriate their profits and pay taxes on it.

That's exactly why it's a very bad idea. Using a voluntary tax that may or may not materialize to fund long-term construction projects is a recipe for fiscal disaster.

Grover Norquist has ruled out fiscal disaster, but not for the same reasons you or I would.

The Highway Trust Fund will go broke at the end of this month unless Congress agrees to a solution or passes another temporary extension. Temporary extensions have already complicated matters for many states.

Arkansas, Georgia, Tennessee, Utah and Wyoming are among states that have postponed bidding on major transportation projects because of uncertainty over federal funding, said Bud Wright, executive director of the American Association of State Highway and Transportation Officials.

"Many of the states are in a position where they can't assume that federal dollars will be there,'' Wright said. "They can only act and move forward if there's some assurance. Some of the higher-profile, bigger projects that require the accumulation of money over a few years just can't go forward.''