WASHINGTON – Members of the Ways and Means Committee traveled to France and Germany over Labor Day weekend to express to European officials Americans’ opposition to the Biden Administration’s unilaterally negotiated global tax surrender. Led by Chairman Jason Smith (MO-08), the delegation’s trip was a direct effort to debunk President Biden and Treasury Secretary Janet Yellen’s misrepresentations in negotiations with foreign governments –making clear that Congress will never accept this agreement – and warning that America will pursue retaliatory measures against any country that targets American companies and workers with punitive taxes.
The members traveling with Chairman Smith were Rep. Ron Estes (KS-04), Rep. Kevin Hern (OK-01), Rep. Carol Miller (WV-01), Rep. Greg Murphy (NC-03), Rep. Michelle Steel (CA-45), Rep. Randy Feenstra (IA-04), and Rep. Nicole Malliotakis (NY-11).
As the Wall Street Journal editorialized in advance of the trip, “Treasury Secretary Janet Yellen signed up for the taxes in 2021 in the hope that global coordination would offer political cover for the Biden Administration’s attempt to raise corporate taxes in the U.S. Those domestic tax hikes couldn’t pass Congress in the form President Biden wanted. But Europeans have pressed ahead with the global tax scheme now that they think they’re free of U.S. opposition that long stymied such international tax grabs.”
In meetings with officials from the Organization for Economic Co-operation and Development (OECD) and the governments of France and Germany, the delegation presented the impact of the deal on the U.S. economy, including how it would give foreign competitors like China an advantage and cause the United States to forfeit over $120 billion of tax revenue over the next decade. The Ways and Means delegation also explained that the Biden Administration lacks constitutional authority to write U.S. tax laws.
Current negotiations at the OECD would permit foreign countries to impose unfair taxes on American workers and make the United States less competitive globally.
Republicans on the House Ways and Means Committee unanimously introduced a bill earlier this year that imposes retaliatory taxes on any foreign country that unfairly targets U.S. businesses and workers under the OECD’s global tax deal.
One of the few points of common ground in the meetings was a shared concern over China’s economic aggression around the world. The delegation warned about the OECD’s special treatment for the Chinese Communist Party’s subsidies for state-backed companies, which will allow them to skirt the rules and avoid the impact of this scheme.
In France, the delegation met with OECD Secretary-General Mathias Cormann and his top economic officials. Despite being a leading promoter of the OECD global tax deal, French Finance Minister Bruno Le Maire declined to make time for the Congressional tax-writers, perhaps misunderstanding that his Biden Administration negotiating partners lack any authority to set U.S. tax law. The delegation met with Finance Ministry staff and laid out the OECD deal’s many problems.
In Germany, bilateral meetings with German Finance Minister Christian Lindner, Federal Minister for Special Affairs of the Chancellery Wolfgang Schmidt, and Chairman Alois Rainer and members of the German Bundestag’s Finance Committee all provided the opportunity for valuable dialogue on a path forward at the OECD.