The American Society of Civil Engineers (ASCE) is concerned that Congress has missed a once-in-a-generation opportunity to address the nation’s infrastructure investment gap. Earlier this month, Congress began the process of crafting tax-cut legislation. The House Ways and Means Committee drafted H.R. 1, the Tax Cuts and Jobs Act, which passed out of committee and the full House 227-205. The Senate Finance Committee drafted and passed their own tax legislation and is currently being debated in the full Senate.
Both proposals contain several provisions that are harmful to infrastructure financing, education opportunities and job creation. Among them, are the following:
- The bills currently lack a permanent solution to the Highway Trust Fund’s revenue deficit.
- The elimination of financing tools used by state and local governments and other entities to improve infrastructure such as the use of private activity bonds (PABs) and the advance refundings of municipal bonds.
- The elimination of tax exemptions that support higher education including Section 127 tax-benefits for employer-provided education assistance, tax-free tuition-waivers for students, tax deductions for student loan interest, and taxes on investments earned by colleges and universities.
- New tax rules that treat professional service corporations such as engineering firms differently than other businesses. Current tax proposals contain language that would exclude professional service firms from the lower rate which means that partners in an engineering pass-through firm would be forced to pay the higher individual tax rate on all their income, while partners of a pass-through firm in another industry would get the lower rate.
Congress should not squander the opportunity found in the tax debate to address the Nation’s need to invest in our infrastructure. Nor should Congress inhibit our ability to finance infrastructure projects, educate and develop the workforce, and create jobs.
We sent the Senate a letter detailing our concerns and opposing the proposals. As this debate moves through the Senate, we urge you to contact your Senators and ask them to support infrastructure and oppose this legislation.