The infrastructure program would be partially financed by a new, one-time corporate tax on profits earned overseas - an estimated $2 trillion that now largely escapes taxation, the official said.
The 14 percent tax on foreign profits would be much lower than the standard 35 percent corporate tax rate — among the highest of the world's major economies — and would apply regardless of whether the companies return, or repatriate, the profits earned overseas to the U.S.
The White House estimates that the tax on foreign earnings would raise $238 billion, about half the money needed to pay for the infrastructure program, the official said.
The remaining $240 billion would come from gasoline taxes that are paid into the federal Highway Trust Fund.
Obama's proposal is an opening offer aimed at what some see as modestly hopeful prospects for a compromise with Republicans in Congress on corporate tax reform.
Motivating lawmakers is the fact that the federal highway fund is now operating under a stopgap measure that expires May 31. Republicans and Democrats are eager for a solution that would avoid a shutdown and disruption in infrastructure projects in progress nationwide.
The White House proposal would extend the life of the highway trust fund by six years.
Obama's plan would apply the 14 percent rate to past profits, and then place a 19 percent tax on foreign profits in the future, the official said. Companies would get credited for foreign taxes paid.
Sens. Barbara Boxer, D-Calif., and Rand Paul, R-Ky., last week proposed a 6.5 percent tax rate, but only on only profits returned to the U.S. that exceed each company's average repatriations.
Last year, a proposal to return overseas profits was announced by a retiring top Republican, Rep. Dave Camp of Michigan, but it was widely panned by his colleagues.
Conservatives in Congress are wary of tax talks with the White House that focus only on popular areas of agreement rather than a broader overhaul of the tax code that would provide permanently lower corporate rates.
Republicans are expected to propose their budget in the spring.
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