Congressional Budget Office Veteran Doubts Trump Infrastructure Tax Incentive Plan

Former CBO head Douglas Holz-Eakin has doubts about the viability of President Trump’s plans to provide $137 billion in tax credits to draw private investment into construction and repairs of America’s roads and bridges. “I don’t think that is a model that is going to be viewed as successful or that you can use it for all of the infrastructure needs that the U. S. has,” he said. Fed Ex CEO Fred Smith echoed that sentiment in testimony before the House Transportation Committee last week: “What needs to happen is to increase the gasoline and diesel taxes,” Smith testified.

George W. Bush’s transportation secretary Mary Peters echoed the criticism, noting that private investors in infrastructure projects need tolls or other revenue streams to provide a return on their investment. Tax credits “probably aren’t useful to the companies that would be willing to invest in these projects,” she said, “because they generally don’t have a tax liability that the tax credits could offset.” Peters noted that private investors in infrastructure construction are often tax exempt pension funds and investment funds controlled by state and local governments who pay no federal taxes.

Wyoming DOT Director Bill Panos testified at the same hearings that “the federal proposals that are being developed may not be applicable to rural states.”