Business Lobbyists Scramble to Kill $100 Billion ‘Revenge Tax'
Business lobbyists are working to kill a measure in the Republican tax policy legislation that would punish companies based in countries that try to collect new taxes from American firms.
The push comes as Senate Republicans are preparing to unveil their domestic policy bill on Monday, which will ultimately need to be passed and merged with the legislation that the House passed last month. That bill imposes a so-called revenge tax on foreign companies that try to enforce the terms of a 2021 global minimum tax agreement or impose digital services taxes on American technology companies.
The legislation would substantially increase the tax bills for many foreign companies that operate in the United States, raising more than $100 billion over a decade. Critics argue that the provision would chill foreign investment at a time when the Trump administration is trying to attract international money.
'I think the president has been pretty unequivocal on where he stands on wanting more investment into the U.S. from international companies,' said Jonathan Samford, chief executive of the Global Business Alliance, which lobbies on behalf of international businesses in the U.S.
Mr. Samford added that the measure 'directly contradicts the president's investment vision.'
The legislation is poised to reignite international tax and trade wars that have been on hiatus as policymakers around the world grapple with how to overhaul the global tax system. It has also stoked anxiety among Wall Street investors and is expected to be a topic of discussion as leaders of the Group of 7 countries gather in Canada this week for a summit.
Since taking office, President Trump has made clear that he wants nothing to do with a 2021 deal brokered by the Biden administration that aimed to rewrite the rules of how the world's largest companies would be taxed around the globe. That deal, which was agreed to by the G7, created a new global minimum tax rate of at least 15 percent that companies would have to pay, regardless of their headquarter location. The aim was to prevent countries from lowering their tax rates as a way to attract multinational corporations, creating a 'race to the bottom' in taxation that left nations with fiscal shortfalls.
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