10 hours ago
Trump Administration Tells Congress to Kill ‘Revenge Tax'
The Trump administration has directed Republican lawmakers to remove a provision from their tax and spending bill that would have hit some international companies operating in the United States.
The decision to remove the so-called revenge tax came as Treasury Secretary Scott Bessent said on Thursday that the United States had reached a deal with other Group of 7 nations that exempts American companies from a separate 'global minimum tax.' That global tax was brokered by the Biden administration and was opposed by President Trump and Republican lawmakers who argued it was giving control of the U.S. tax base to other nations.
The move to drop the revenge tax follows intense lobbying pressure from international business groups, which warned the new tax would hurt American workers and chill foreign investment in the United States. Mr. Bessent, in a post on social media, said that the United States would work with other nations to enact the agreement more broadly across the Group of 20 nations and the rest of the world.
'This understanding with our G7 partners provides greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond,' Mr. Bessent wrote. 'By reversing the Biden administration's unwise commitments, we are now protecting our nation's authority to enact tax policies that serve the interests of American businesses and worker.'
The revenge tax was included in the tax and domestic policy bill moving through both the House and Senate in response to the 2021 global minimum tax. The levy would punish companies based in countries that either adhere to the terms of the global minimum tax agreement or impose digital services taxes on American technology companies. Several countries have enacted these taxes on income that businesses earn online regardless of where they are physically located.
If it had been signed into law, the provision would have substantially increased the tax bills of many foreign companies that operate in the United States. It was expected to raise more than $50 billion over a decade, according to congressional estimates. A House version of the measure was even more onerous, allowing the United States increase tax rates on foreign companies by as much as 20 percentage points over time if their headquarters were in 'discriminatory foreign countries' with 'unfair foreign taxes.'
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