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Ways and Means Republicans Introduce Legislation to Reinforce Trump Administration’s Rejection of Biden Global Tax Surrender

January 22, 2025

WASHINGTON, D.C. – The Trump Administration will be fully equipped to deploy any economic countermeasures necessary to protect American workers and job creators from foreign nations that seek to impose extraterritorial or discriminatory taxes on American businesses, outlined in legislation introduced today by Ways and Means Committee Chairman Jason Smith (MO-08) and all 25 Committee Republicans. The Defending American Jobs and Investment Act comes on the heels of President Trump’s executive order to cancel U.S. involvement in the global tax scheme, which the Biden Administration had been negotiating at the Organization for Economic Co-operation and Development (OECD) that gives foreign nations the authority to place discriminatory taxes on American companies.

Ways and Means Committee Chairman Smith (MO-08) issued the following statement:

“Congressional Republicans made it clear as soon as the Biden Administration initiated its negotiations with the OECD that the United States would never be party to a global tax surrender. Now with President Trump in the White House, we finally have a leader who will defend American workers and businesses against economic attacks by other nations. One of the Trump Administration’s first actions was to reject the OECD framework that would have destroyed U.S. jobs, forfeited an estimated $120 billion in tax revenues, and enhanced China’s competitive advantage. The Defending American Jobs and Investment Act will ensure that President Trump has every tool at his disposal to pushback against any foreign country that seeks to undermine America’s economic vitality or unfairly target our workers and businesses.”

Background:

The Defending American Jobs and Investment Act, co-sponsored by every Republican Member of the Ways and Means Committee, protects American jobs and economic growth with reciprocal taxes applicable to any foreign country that decides to target Americans with unfair taxes under the OECD’s global minimum tax:

  • Requires the Treasury Department to identify extraterritorial taxes and discriminatory taxes enacted by foreign countries that attack U.S. businesses, such as the UTPR surtax.
  • After the unfair foreign taxes have been identified, the tax rates on U.S. income of wealthy investors and corporations in those foreign countries will increase by 5 percentage points each year for four years, after which the tax rates remain elevated by 20 percentage points while the unfair taxes are in effect.
  • The reciprocal tax ceases to apply after a foreign country repeals its extraterritorial and discriminatory taxes.
  • The reciprocal tax will remain dormant as long as countries avoid any unfair taxes on U.S. businesses and workers. Several countries have already made the wise decision to exclude the UTPR surtax from their implementation of the OECD global minimum tax.

The Joint Committee on Taxation (JCT) issued an analysis finding that the United States stands to lose over $120 billion in tax revenues under the OECD’s global minimum tax scheme.

Last Congress, Chairman Smith led a delegation of Ways and Means Committee members to meet with OECD, French, and German leaders to deliver the message directly that the U.S. Congress would never approve of surrendering America’s taxing authorities to foreign capitals: