Bond Buyer 6/10/14 2:14pm ET By Jim Watts

DALLAS — Sen. Patty Murray, D-Wash., said Tuesday that eliminating “specific, wasteful” corporate tax loopholes is a better way to supplement the Highway Trust Fund than a competing Republican proposal that would limit Saturday mail deliveries.
Unless Congress acts quickly to bolster the fund that supports federal highway aid to states, she said, it will run dry before the end of fiscal 2014.
“Our tax code is riddled with wasteful tax loopholes that benefit the wealthiest Americans and the biggest corporations,” Murray said in a speech on the Senate floor. “And we can use the revenue generated by closing just a few of them to avoid an unnecessary crisis, shore up the Highway Trust Fund, and make the critical investments we need in our roads and bridges across the country.”
Highway projects from coast to coast come to a halt in August if the Transportation Department has to curtail reimbursements to states because the highway account’s cash reserves fall below $4 billion, she said.
“A crisis in the Highway Trust Fund could jeopardize thousands of important transportation projects around the country if Congress doesn’t act.” Murray said. “The crisis is no longer a hypothetical. It has already caused states to plan for a construction shutdown if Congress doesn’t act.”
House Republicans have proposed a cut down in mail delivery to a modified five-day delivery system. The savings realized over 10 years would offset a general fund transfer of $12 billion to $15 billion into the Highway Trust Fund for fiscal 2015.
“I believe that’s the wrong way to go.” Murray said. “There are better ways to address both postal service reform and the Highway Trust Fund shortfall.”
Elimination of a provision that allows corporations to avoid taxes by compensating executives with stock options rather than paychecks would save up to $50 billion over 10 years, Murray said. Another $15 billion of payroll taxes could be generated over the same span by preventing business owners from claiming their income as a business profit rather than a salary, she said.
“These are just two wasteful and unfair tax loopholes that both Democrats and Republicans have proposed closing,” Murray said. “And the list goes on and on.”
Murray did not discuss President Obama’s repatriation proposal to supplement the fund over four years with $160 billion generated through reforms of the corporate tax code designed to capture the offshore earnings by U.S. corporations’ foreign subsidiaries.
A proposal to allow multinational corporations to deduct 85% of foreign earnings brought back to the U.S. would generate up to $30 billion through 2015, the Joint Committee on Taxation said in a letter last week to Sen. Orrin Hatch, R-Utah. But JCT said the plan would cost the Treasury up to $96 billion over the next 10 years because many of those earnings eligible for the low tax rate would come into the U.S. in any case.
“The Joint Committee on Taxation has clearly outlined the ramifications of a temporary tax holiday, and the outlook is not in the best interest of the American people nor for the coffers of the federal government,” said Hatch, the ranking Republican on the Senate Finance Committee.
Hatch and committee chairman Ron Wyden, D-Ore., said they plan to use any repatriation revenue to offset comprehensive tax reform.
“We will also continue to look for innovative ways to fix the depleted Highway Trust Fund and keep hard-working Americans on the job without diverting revenues from repatriation needed for tax reform,” they said in a joint statement last week.
Federal taxes on gasoline and diesel fuel will generate about $38 billion in 2014 for transit and highway projects funded through the Highway Trust Fund, the Congressional Budget Office said last week, but expenditures will top $53 billion. Unless the fund is supplemented before fiscal 2015 begins Oct. 1, CBO said, no new projects could be funded be funded next year.

Read More