Ron Wyden Proposes Tax Law Changes to Temporarily Sustain Highway Trust Fund
Posted at 4:03 p.m. on June 24, 2014
(Tom Williams/CQ Roll Call)
With the clock ticking down to a cash flow crisis in the Highway Trust Fund this summer, Senate Finance Committee chairman Sen. Ron Wyden offered a $9 billion remedy Tuesday that would sustain the fund through the end of December. Wyden’s committee will mark up his bill Thursday.
The Oregon Democrat would draw on five different revenue sources. The biggest of them would be a change in how inherited individual retirement accounts are paid out to heirs.
Under current law, a 25-year old who inherits an Individual Retirement Account from a parent could collect payments for the rest of his life, with a required minimum distribution of money from the IRA each year.
Wyden’s provision would require retirement savings accounts to be paid out within five years of the death of the account holder in most cases. That would raise $3.7 billion in revenue over 10 years, according to an estimate by the staff of the Joint Committee on Taxation.
The most significant part of Wyden’s package for those who drive the nation’s highways was his $1.3 billion increase in taxes on heavy trucks. This provision would replace the current $550 annual limit on the highway use tax for vehicles over 75,000 pounds, with a $1,100 cap for vehicles over 97,000 pounds.
The initial response from Finance Committee ranking Republican Sen. Orrin Hatch of Utah was chilly. To fix the Highway Trust Fund’s financing, the committee must “forge compromise by including a sizeable amount of reductions in wasteful and low-priority spending,” the Utah Republican said. “Unfortunately, even after weeks of negotiating, today’s Chairman’s Mark does not accomplish this goal.”
But Hatch said he’d keep working with Wyden to devise a bill that can pass both House and Senate and be signed by President Barack Obama.
The Department of Transportation’s “trust fund ticker” for the account that helps pay for highway building shows that account hitting a zero balance in late August.
Response to Wyden’s proposal from other quarters was mixed:
The American Trucking Associations said, “We are currently evaluating Sen. Wyden’s proposal to ensure the short-term solvency of the Highway Trust Fund. We appreciate the Senator’s leadership on this critical issue and urge Congress and the administration to guarantee the Trust Fund’s solvency in the near term, and work together to set the course for long-term, reliable funding.”
The statement said that while there are other options, “an increase in the fuel tax is well known to be the fairest, most reliable and efficient method of raising money for infrastructure investment.”
A lobbyist for the American Road & Transportation Builders Association said Wyden’s is “the only proposal that is on the table to prevent a rationing of federal funds for already approved projects in the next 30 days and a shutdown of highway, bridge and transit investments beginning October 1.”
Specifically on the heavy vehicle use tax, the ARTBA lobbyist recalled that the Senate Finance Committee “created the National Surface Transport Infrastructure Financing Commission in 2005. Doubling the use tax was one of this blue-ribbon panel’s recommendations in 2009. Had that Commission’s total recommendations been followed, the trust fund would have been stabilized a long time ago and our members would be focused right now on delivering transportation improvements rather than wondering if they will keep their jobs this summer.”