White House proposes new foreign profits tax

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On Monday, President Barack Obama will use his budget plan to propose spending $478 billion on America's roads, bridges and mass transit systems, with half of that steep bill financed by new taxes on U.S. corporate profits that are squirreled away overseas, White House officials said.

"These investments will increase infrastructure funding by over a third, support hundreds of thousands of American jobs and lay the foundations for long-term economic growth," the official.

The infrastructure push comes as the President is set to unveil his 2016 budget in a speech at the Department of Homeland Security in Washington on Monday. Both Republicans and Democrats have cited transportation needs as well as tax reform as priorities for the upcoming fiscal year.

Still, the White House tax proposal aimed at foreign profits for U.S. companies is far more ambitious than what GOP lawmakers, now in control of Congress, are likely to approve.

Continuing the Obama administration's efforts to crackdown on foreign tax shelters, the White House proposal would put in place a one-time 14% transition tax on the foreign earnings already accumulated overseas.

The White House estimates that this revenue, along with money from the Highway Trust Fund, would fully finance a six-year infrastructure investment plan as part of Obama's proposal.

In the future, the U.S. would also apply a 19% tax rate on new foreign earnings, while providing a credit for foreign taxes already paid, under the administration's plan.

"The reformed system would close loopholes that allow U.S. companies to shift profits to tax havens and avoid paying tax on them for years or forever," the White House official said.

The new chairman of the House Ways and Means committee, Rep. Paul Ryan, R-Wisconsin, a frequent critic of the President's economic policies, said in an interview on Sunday that he is interested in working with the administration, as well as Democrats in Congress, to find some fiscal common ground.

"We want to work with the administration to see if we can find common ground on certain aspects of tax reform and exhaust that possibility. If and when that possibility is exhausted, then we will put out what we think ought to be done," Ryan said on NBC's "Meet the Press" on Sunday.

"We really believe that we should reform the entire tax code for all people, individuals, families, businesses, simpler, the whole thing. But it is pretty clear to us that the President doesn't agree with that on individuals," Ryan said.

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