When a current two-year transportation bill expires at the beginning of November, a number of construction projects may be jeopardized. During a recent address at St. Paul's Union Depot, President Barack Obama told the crowd of roughly 1,300 people that if the transportation bill isn't renewed by the end of the summer, construction jobs would be lost, sites would be shut down and machines would be sitting unused. While lawmakers are still considering the four-year, $302 billion bill proposed by Obama to upgrade transit systems and highway infrastructure, it gained some support with the recent legislation created by House Ways and Means Committee Chairman Dave Camp, from Michigan.
Obama States Tax Reform Can Greatly Benefit the Construction Industry
Camp's proposal to rework the tax code would allocate $126.5 billion to fund highway and infrastructure investments, as well as lower the top tax rates for construction businesses from 35 percent and 39.6 percent to 25 percent, according to the organization Associated Builders and Contractors. The Qualified Domestic Manufacturing Income rate would be given to any firm that can prove "construction of real property in the United States as part of the active conduct of a construction trade or business," the ABC reported
"The Tax Reform Act of 2014 also provides the certainty that no business - whether a small business or a large corporation - engaged in domestic manufacturing, production, farming, extraction, or construction would be taxed at a rate higher than 20 percent," a draft of the bill states, according to ABC.
The Gas Tax May Impede Approval
Some lawmakers believe the transportation bill being pushed by Obama and Transportation Secretary Anthony Foxx could gain support from Congress if it didn't include an increase of the gas tax, which has remained steady at 18.4 cents per gallon since 1993.
"I don't see support for raising the gas tax," Calif. Sen. Barbara Boxer,the leader of the committee in charge of the highway bill, recently told the American Association of State Highway Transportation Officials, according to USA Today. "It's going to have to be a creative way to fund this."
Obama Needs Approval of the Tax Reform Bill
With Congress opposed to raising the gas tax, the tax code written by Camp may be the only hope for Obama to get the funds to go forward with the plans to repair the national transportation infrastructure. Rep. Bill Shuster of Pennsylvania supports the tax reform, and said Camp's tax plan a "fiscally responsible provision."
"I am committed to moving forward with fiscally responsible transportation solutions to promote competitiveness and economic growth, reform programs, and focus our resources where they are needed most," Shuster said.
With Shuster's support, Obama may have second chance to get the highway bill completed before summer. USA Today reported if he can make that happen, he and Foxx will be able to make use of $600 million in construction grants the government recently received for local projects nationwide. Many view this as a potential opportunity to not only add construction jobs and boost the economy, but also further improve the aging highway and transportation infrastructure throughout the nation.