As the Biden Administration continues to negotiate a global tax surrender without consulting Congress, Ways and Means Republicans, led by Rep. Kevin Hern (R-OK), urged Treasury Secretary Janet Yellen to work with lawmakers to protect U.S. competitiveness and American jobs.
In the letter, the members write:
“We are concerned by the Administration’s unilateral effort to commit the United States to global tax policies that could diminish the United States’ competitiveness on a global scale and have grave consequences for our domestic economy.”
“It is a fool’s errand for the Administration to engage in the OECD digitalization tax agreement negotiations without substantive bipartisan input from tax-writing committees in the House and Senate.”
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“We are concerned by the Administration’s unilateral effort to commit the United States to global tax policies that could diminish the United States’ competitiveness on a global scale and have grave consequences for our domestic economy. Furthermore, we believe that the Constitution does not permit the Administration to bind the United States internationally to such policies without express Congressional consent.”
“(W)e urge the Administration to work with Congress to examine the recent changes to international tax policy that it has embraced in this context, before making additional undertakings to foreign countries that lack the Congressional support necessary to be implemented at home.”
“Since TCJA’s enactment, we have seen an abrupt halt in corporate inversions and a measurable return of investment to the United States. Instead of building on the demonstrated success of the 2017 tax reform, the Administration is proposing to burden American firms with a new set of international obligations.
“Our international treaty network has worked well over the last century to promote bilateral trade, investment, and prosperity. We understand the importance of progress on new global tax agreements, but we believe that Congress must approve any commitments that might erode the U.S. revenue base or significantly impact bilateral trade and investment flows.
“It is extremely troubling that the Administration has made promises to the world without sufficient bipartisan, bicameral consultation.”
“Therefore, it is a fool’s errand for the Administration to engage in the OECD digitalization tax agreement negotiations without substantive bipartisan input from tax-writing committees in the House and Senate.”
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 October 2021, 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 September 2021, 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.