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Thursday, July 2, 2009
3:56 PM EDT
Sandra Fabry

Double-Taxing U.S. Firms on Foreign Profits to Bail Out Highway Trust Fund?

The next bailout on deck seems to be a bailout of the Highway Trust Fund, which, as Obama administration officials said will likely run out of cash by the end of August, and could be in the red by $5 to $7 billion. 

According to CQ Today, the Transportation Department has sent Congress details on their plan to borrow $20 billion from the Treasury's general fund. 

One of the pay-fors being mulled by the administration is the "international tax enforcement proposals" that were included in the Obama tax-and-spend budget, one of the most controversial of which was to limit, or effectively repeal a company's ability to "defer" U.S. taxes on overseas income.

As we've pointed out before, this could be extremely damaging to the U.S economy, and would amount to double-taxing foreign profits:

Repeal of the rules governing the way the United States taxes the foreign earnings of U.S. companies could have dramatically adverse effects on U.S. jobs and investment and leave U.S. companies less competitive in global markets, according to a new economic report.

The report, authored by Robert J. Shapiro, a former Clinton Administration economic official, and Aparna Mathur, a Research Fellow at the American Enterprise Institute, found that as many as 2.2 million American jobs could be affected by a repeal, or effective repeal, of  "tax deferral."  

But what's another few million, right? Or wait, maybe they will just claim they "saved" 2.2 million jobs elsewhere, so it's a wash...

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