WASHINGTON, D.C. – Ways and Means Committee Chairman Jason Smith (MO-08), along with every Committee Republican, introduced H.R. 3665, the Defending American Jobs and Investment Act, to prevent President Biden’s global tax surrender from killing American jobs, surrendering sovereignty over our tax code, and handing a competitive advantage to the Chinese Communist Party. The bill creates a reciprocal tax applicable to any foreign country that imposes unfair taxes on U.S. businesses and workers under the Organization for Economic Co-operation and Development (OECD)’s global tax deal. Chairman Smith released the following statement on the introduction of the Defending American Jobs and Investment Act:
“This bill sends a clear warning to any nation tempted to exploit the success of our workers and businesses for its own gain. Republicans are taking action where the Biden Administration has failed—in standing up for the interests of American workers and families. We will not allow a bad deal negotiated by the Biden White House to enable foreign governments to steal away Americans’ jobs and opportunity, and we will not stand idly by while other countries use the OECD global tax deal to extract over $120 billion in U.S. tax revenue over the next decade.
“The Biden Administration has played right into China’s hands with an OECD global tax deal that shifts jobs and tax revenues out of the United States. By penalizing U.S. tax policies and favoring state subsidies by the Chinese Communist Party and others, the Biden Administration will kill jobs at home and concede America’s innovation leadership to the CCP.
“Despite President Biden’s attempts to surrender our tax authority to foreign nations, Ways and Means Republicans will not enable those governments in undermining U.S. job creators. As the exclusive trade and tax-writing committee in the House of Representatives, the Ways and Means Committee has a variety of tools that can be deployed to stop bad actors that try to harm American workers and businesses. We remain prepared to invoke additional tax and trade countermeasures, should these attempts to undermine our tax sovereignty continue.
“We urge our global trading partners to reject all unfair taxes aimed at Americans, and we encourage countries, the OECD, and multinational companies to work toward solutions that will protect sovereign taxing rights and avoid escalating tax and trade countermeasures.”
Background on the Defending American Jobs and Investment Act:
H.R. 3665, co-sponsored by every Republican Member of the Ways and Means Committee, protects American jobs and economic growth with reciprocal taxes applicable to any foreign country that decides to target Americans with unfair taxes under the OECD’s global minimum tax:
- Requires the Treasury Department to identify extraterritorial taxes and discriminatory taxes enacted by foreign countries that attack U.S. businesses, such as the UTPR surtax.
- After the unfair foreign taxes have been identified, the tax rates on U.S. income of wealthy investors and corporations in those foreign countries will increase by 5 percentage points each year for four years, after which the tax rates remain elevated by 20 percentage points while the unfair taxes are in effect.
- The reciprocal tax ceases to apply after a foreign country repeals its extraterritorial and discriminatory taxes.
- The reciprocal tax will remain dormant as long as countries avoid any unfair taxes on U.S. businesses and workers. Several countries have already made the wise decision to exclude the UTPR surtax from their implementation of the OECD global minimum tax.
Read bill text here.