In a joint statement, Congress’s top Republican tax writers, House Committee on Ways and Means Republican Leader Rep. Kevin Brady (R-TX) and Senate Committee on Finance Republican Leader Senator Mike Crapo (R-ID), blasted the Biden Administration’s surrender to foreign competitors’ discriminatory digital services taxes:

“Rather than preserving our ability to protect American businesses and jobs, the Biden Administration is surrendering once again to our foreign competitors to further their objective of raising taxes on Americans. Worse, the Administration is pressuring Congress to accept its demands by letting foreign nations discriminate against our businesses and workers until it does so.

“The Biden Administration is claiming victory despite a bipartisan consensus against foreign digital services taxes that unfairly target U.S. companies. A comprehensive U.S. Trade Representative (USTR) report determined these taxes are unreasonable and unfairly burden U.S. commerce.

“Instead of taking action, however, the Biden Administration retreated by failing to demand immediate repeal of discriminatory taxes, which will continue for years, if not indefinitely. The Administration simply settled for an empty promise—if we reform our tax laws to these countries’ satisfaction, then they will grant U.S. businesses tax credits against future taxes.”

Background: The U.S. Treasury Department recently acknowledged significant U.S. tax law changes would need to be made to the U.S. global minimum tax (GILTI) in order to comply with the OECD agreement negotiated by Treasury. Despite the fact the United States remains the only country with a global minimum tax, the Administration is using the OECD process to push for aggressive changes to GILTI – before any other country acts. In early October, Rep. Brady and Sen. Crapo warned that compelling Congress to take specific legislative action undermines Congress’s taxing authority, and would ultimately make American companies less competitive globally.

In early September, Brady and Crapo sent a letter to their Democratic counterparts outlining serious concerns with the approach the Biden Administration has taken in international tax negotiations at the OECD. Brady and Crapo have consistently said the Administration should not negotiate for an agreement at the OECD that would target American companies or make them less competitive, ultimately resulting in fewer jobs, growth, and U.S. investment.