WASHINGTON, D.C. — The Biden Administration is using the negotiations at the Organisation for Economic Co-operation and Development (OECD) to compel Congress to make aggressive U.S. tax law changes undermining Congress’s authority, warn the top Republicans tax-writers. U.S. House Ways and Means Republican Leader Rep. Kevin Brady (R-TX) and U.S. Senate Finance Committee Ranking Member Sen. Mike Crapo (R-ID) 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.
In the letter, the Members wrote:
“Soon after negotiating an agreement at the OECD, Treasury Secretary Yellen acknowledged that Congress would be required to enact significant domestic tax law changes in order to comply with the agreement. Whereas prior administrations took the position that Treasury cannot bind Congress, this Administration has taken the approach of using the global stage to attempt to force Congress’s hand.
“This concerning development suggests the Administration has represented to our global partners that it can unilaterally compel changes in tax law, a significant infringement on Congressional authority.”
Read the full letter HERE.
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. Compelling Congress to take specific legislative action undermines Congress’s taxing authority, and would ultimately make American companies less competitive globally.
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.