WASHINGTON – During a Ways and Means Tax Subcommittee hearing examining the Organization for Economic Co-operation and Development (OECD) global tax deal negotiated by the Biden Administration, Committee Members found the proposal would hurt American companies, kill American jobs, give Chinese Communist Party-sponsored businesses a global economic advantage, and surrender $120 billion in U.S. tax revenue. While Republican tax code efforts are focused on listening to Americans and providing them relief from the Biden economy, the Biden Administration has negotiated a global tax surrender without the consent of and without consulting with Congress, the branch of government that has constitutional authority over the tax code. In fact, a Treasury official testifying before the committee was unable to provide substantiation for claims that the Treasury Department consulted Congress. Nor could they answer why the Biden Administration entered into a deal that weakens America’s economy.
8 Times: Treasury Department Can’t Say When It Consulted Congress on Biden’s Global Tax Surrender
The Constitution gives Congress the authority to write America’s tax laws, and the Supreme Court has reaffirmed that power, yet the Biden Administration never once asked Congress for feedback about a global tax surrender that has massive implications for America’s workers, companies, and tax revenues. Even though Ways and Means Committee Chairman Jason Smith (MO-08) asked a Biden Treasury Department official eight times to cite when thinking through key tax code decisions when and where Congress was consulted, the official could not identify a single moment when one Treasury official received feedback from a Member of Congress.
Chairman Smith: “Was Congress consulted prior to Treasury agreeing to a UTPR surtax that would allow foreign governments to tax the U.S. operations of U.S. companies?”
Mr. Plowgian: “We did receive input from Congress on the UTPR during the negotiations…We did receive input from Congress.”
Chairman Smith: “I have followed this issue very closely over the past three years, and I don’t think that’s the case. I know that Treasury has never consulted with Republican members prior to a decision. And unless you would like to revise your testimony, please provide to this committee in writing, the date of the consultation, the names of Treasury personnel involved, and the names of members of Congress that Treasury met with. Can you get me that information?”
OECD Is Another Global Institution Where the Deck is Stacked Against America
The OECD, the organization colluding with the Biden Administration on its global tax surrender, is largely controlled by European nations and their former colonies and has amassed over 130 signatory nations to its global tax scheme. Yet, the burden of the deal falls largely on American businesses, with American firms slated to pay 60 percent of the taxes under Pillar 1 of the agreement. The decision by the Biden Administration to play by OECD rules shows a stunning betrayal of the American employers and workers who will be affected by this tax deal.
Rep. Kelly: “So why then, would Treasury negotiate an OECD deal that surrenders over $120 billion? It’s $120 billion in U.S. tax revenues to foreign countries. This makes absolutely no sense. Now the OECD global tax project is effectively controlled by Europe. Why? Because Europe controls 1/3 of the seats on the Steering Committee, and the broader inclusive framework includes over 30 tiny former European colonies. Members of this group include Cook Islands, the Bahamas, St. Lucia, and Samoa. The bottom line is the deck is stacked against America at the OECD. That is why it has never made sense for Treasury to negotiate behind closed doors with a group of 140 nations on a ‘one-country, one-vote’ basis when the U.S. accounts for 25 percent of global GDP and pays almost that percentage of dues at the OECD.”
America’s Tax Code Is Meant to Give America A Global Advantage, Not A “Level the Playing Field”
The Republican-passed Tax Cuts and Jobs Act made America’s tax code more competitive and helped both American job creators and workers around the world. As Rep. Drew Ferguson (GA-03) pointed out, Republicans are focused on helping Americans win in a global economy, while the Biden Administration has negotiated a tax deal that surrenders $120 billion of America’s tax revenues.
Mr. Plowgian: “Pillar two is about leveling the playing field for US businesses…”
Rep. Ferguson: “Level the playing field for U.S. businesses? Wait a minute. We’re about the American people, the American workers, and American businesses and innovators and creators. We are not about leveling the playing field with the rest of the world. We’re about being number one day in and day out. This whole business of leveling the playing field; it is a farce. We’re either going to be number one in the world or we’re not.”
Biden Admin is Turning America’s Success Into Europe’s Socialist Failures
Recent articles in the Wall Street Journal and the Washington Post have highlighted the outcomes of Europe’s socialist policies – economies that are increasingly falling further behind the United States. Instead of reforming the tax code to help American workers and families compete globally, Rep. Carol Miller (WV-01) pointed out that the Biden Administration plans to send American tax dollars to prop up Europe’s ailing economies.
Rep. Miller: “Do you consider socialism to be a key goal of the Biden administration?”
Mr. Plowgian: [Stammers]
Rep. Miller: “The OECD tax project is a thinly veiled attempt to neuter the U.S. economy and drive America into the arms of global socialism. Europe’s economy struggles to adapt to the modern world, and these countries aim to capture our U.S. dollars to fund their socialist programs and government handouts.I’m just really concerned while the OECD’s proposed deal would protect refundable tax credits, also known as direct subsidy; most U.S. tax credits are not refundable, and for good reason. The U.S. is the most innovative nation on the planet and we attract the best and brightest to start and grow their businesses here. We do not need direct government checks payable to industry, nor should we offer them. Many countries in Europe don’t prize innovation or competitiveness like we do. And that’s why so many of them come to the United States. So these countries have the sovereign right to determine their own tax code, incentive structures and national agendas. They do not have the right to try and fund themselves with U.S. tax dollars.”