Construction industry pushes back against GOP tax reform provisions
- The House Republican tax bill would eliminate tax breaks for a popular funding mechanism used by public-private partnerships (P3s) and put an end to electric vehicle tax credits, according to The Hill.
- The GOP measure would do away with the tax-exempt benefit of private-activity bonds (PAB's), which many private companies have used in the past to finance infrastructure projects, and would ax a $7,500 tax credit for those who buy electric and plug-in hybrid vehicles. Republicans have also proposed a 25% pass-through entity tax rate in the Tax Cuts and Jobs Act, but make some professional services like engineering and consulting ineligible, according to Engineering News-Record.
- Absent from the bill are any set-asides for the president's $1 trillion infrastructure plan or a way to add to the Highway Trust Fund, which is projected to run dry in the next decade. The measure would also eliminate some tax credits for historic preservation and for making buildings energy efficient.
The president featured private-sector involvement as the main driver of his plan to overhaul the country's infrastructure during the campaign and for most of his time in office thus far. This latest proposal from the GOP, however, as well as some of the president's comments in the past few months, have indicated a move away from that position.
For example, tax-exempt PAB's are on the chopping block, but, in his 2018 budget request, President Trump proposed lifting the cap on this funding tool to encourage private investment of at least $800 billion into infrastructure projects.
In fact, earlier in the year, House Speaker Paul Ryan, R-WI, in an interview with Charlie Rose, said the big infrastructure initiative, about which the administration has yet to reveal specifics, would use $40 of private money for every $1 of public funding. Like Trump, he also said that (P3s) would play a significant part in the plan.
But in the past few months, the president has indicated he is walking away from his pro-private-sector stance, at least as it pertains to infrastructure. In late September, he reportedly told a group of House Democrats that P3s were "more trouble than they're worth" and said the private sector wouldn't play a major part in his infrastructure plan, a 180 from his previously stated position.
- The Hill GOP tax bill has transportation advocates scrambling
- Engineering News-Record Construction Groups Slam House 'Pass-Through' Tax-Bill Provisions
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