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Tax holiday could bring up to $60B: Paul

It's safe to say Sens. Rand Paul and Harry Reid are a political odd couple. The former is a tea party darling and the latter a longtime stalwart for the Democratic Party.

Yet the two are taking the high road and working together on a proposal that would, well, fix roads.

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Sen. Rand Paul, R-Kentucky, speaks at the Maine Republican Convention, April 26, 2014, in Bangor, Maine.
AP
Sen. Rand Paul, R-Kentucky, speaks at the Maine Republican Convention, April 26, 2014, in Bangor, Maine.

Untaxed corporate profits of U.S. companies operating overseas stands at roughly $2.1 trillion, by some accounts. In turn, Paul, R-Ky., and the Nevada Democratic Senate majority leader have proposed a one-time tax repatriation holiday to encourage those companies to bring that money back to the United States, possibly creating a short-term Treasury windfall of up to $60 billion in the next three years.

"I think this is a win-win situation. Lower tax and bring in more revenue," Paul said on "Squawk Alley."

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Though terms of the proposal are still being worked out between parties, Paul said the tax rate will fall below 10 percent. He also said the tax holiday would wrap into the transportation bill, thereby allocating the increased revenue toward building new roads and bridges.

At this point, talks are being held up by some on Capitol Hill who have the "traditional Washington mentality" of either doing a big tax reform bill or nothing at all, Paul complained.

"For the four years I've been here, we've gotten nothing. I say break this baby up into small pieces. Do this on the transportation bill in the next three weeks, and we'll do something that Republicans and Democrats both like: Lower a tax, bring in more revenue and build more roads," he said.

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—By CNBC's Drew Sandholm

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