Recently, President Barack Obama presented his tax plan for 2016, setting in motion the annual budgeting cycle. The president’s tax plan again this year served as a wish list of his policy goals in comparison to those of the GOP, and as usual, this ignited furious partisan debate. A particular segment — a provision that interlocks corporate tax rates and infrastructure spending — has caught significant attention from both sides of the aisle.

At first glance this classic tax-and-spend should turn off a number of interest groups, not to mention the spending-leery and Congressionally-dominant Republican Party. But a number of major players from across the board are giving Obama’s plan a second look — as they should.

Obama’s plan calls for a one-time 14 percent tax on all corporate earnings, which under current law avoid taxation until they are repatriated. As expected, this has encouraged large American corporations to hold their international profits overseas, rather than subject them to the current, significantly higher tax rates, which range between 28–35 percent. After this one-time tax, the corporate tax rate will be set across the board at a lower 19 percent, regardless of where the earnings are held.

With the estimated $238 billion that could be brought in by this one-time tax, the president plans to fund part of a $478 billion, six-year infrastructure plan, with the remaining $240 billion coming from the Highway Trust Fund. The plan would fund a necessary revitalization of the nation’s deteriorating transportation systems. Democrats and Republicans alike have both acknowledged a need for infrastructure improvements and know that Highway Trust Fund revenues are expected to fall $13 billion short next year.

Republicans, as a whole, are less than giddy about the nearly half trillion dollars that the White House wants to spend on infrastructure improvements. Sure, repairs are great, and the boost to domestic business is something they’ve been trying to accomplish themselves, but good politics win out over good policy more often than not. The amount that the president has asked to be set aside for this project is almost exactly the same size as the budget deficit, and many GOP leaders would jump on the opportunity to balance the budget in a swift and simple move. While such a targeted slashing of spending would be convenient, it is beginning to look unlikely that such a direct attack on this plan will pan out.

For all intents and purposes, there shouldn’t be much of a fight from the Republican Party. Many aspects of the plan might sound familiar — its own Rep. Dave Camp (R-Mich.) proposed a similar one-time tax as part of his proposed reforms last year as the chair of House Ways and Means.

On the tax side of the equation, businesses are expectedly resistant to such a change in policy. The Wall Street Journal reported that General Electric and Apple had $110 billion and $54.4 billion in earnings held abroad, respectively. That’s not a small chunk of change, and corporations don’t want to have to pay up now.

On the other side of the argument, however, is that as corporate tax reform plans come, this is a fairly amenable and stable one. Even with the inclusion of overseas profits, an overall lowering of corporate taxes for many corporations would likely result in overall lower tax liability for many companies, which may ease the pain of the one-time tax. Regardless, their advocates in the GOP should be seriously considering this plan.

With a blue White House for the next two years, the Republican Congress is going to need to find some points of compromise — here’s where they can start.

Zach Goldberg is a senior economics, policy studies and energy and its impacts major. His column appears weekly. He can be reached at [email protected].

Published on February 19, 2015 at 12:00 am