Washington, D.C. – The United States stands to lose billions of revenue under the Organization for Economic Cooperation and Development’s (OECD) plan to reallocate global taxing rights – known as Pillar One – negotiated by the Biden Administration, according to an analysis by the nonpartisan Joint Committee on Taxation (JCT). JCT estimates that about 70 percent of the profits subject to reallocation under Pillar One will come from U.S.-based companies. The Biden Administration is considering committing to this agreement by the end of this month, in preparation for a formal signing ceremony in June.

House Committee on Ways and Means Chairman Jason Smith (MO-08) and Senate Finance Committee Ranking Member Mike Crapo (R-ID) issued the following joint statement on the JCT analysis:

“By month’s end, the Biden Administration may commit to signing a global deal that surrenders U.S. taxing rights, in exchange for other countries’ promise to not impose certain discriminatory taxes on American businesses. However, JCT’s analysis provides ample reasons why the Administration should not sign on to the current version of the deal.

“JCT estimates the U.S. will lose billions of dollars under this deal which overwhelmingly affects American companies. Moreover, according to JCT, this deal would ‘increase complexity,’ undermine ‘tax sovereignty,’ introduce ‘distortive behaviors,’ and create ‘inefficient incentives.’ Those terms do not inspire confidence that this deal would provide American companies greater tax certainty and stability – especially given concerns that the deal’s definition of prohibited discriminatory taxes is ‘too narrow, limiting, and susceptible to circumvention.’

“Make no mistake, we oppose discriminatory taxes targeting American companies. However, the bad behavior of foreign countries imposing them should not be rewarded by accepting a deal that reduces U.S. revenue, undermines our tax sovereignty, and fails to provide more stability to boost American companies in the global marketplace. We encourage the Biden Administration to redouble its efforts to negotiate – with robust congressional consultation – a good deal for American workers and businesses.”