Brady, Crapo: Biden Global Tax Deal Puts Politics Over Progress, Surrenders Fate of U.S. Economy to Foreign Competitors
Washington, D.C.--In a joint statement, Congress’s top Republican tax writers, Senate Finance Committee Republican Leader Mike Crapo (R-Idaho) and House Committee on Ways and Means Republican Leader Representative Kevin Brady (R-Texas), blasted the Biden Administration’s announcement that it had reached an agreement with the Organization for Economic Cooperation and Development:
“Rather than securing an agreement that would provide certainty and immediately eliminate digital services taxes, the Administration has instead used this global forum to advance its short-sighted domestic tax agenda.
“By doing so, the Biden Administration is putting politics over progress and surrendering the fate of the U.S. economy to our foreign competitors.
“Today’s announcement confirms the Biden Administration has overshot the mark in its race to raise the U.S. global minimum tax to the highest in the world, putting America at a serious disadvantage and making it better to be a foreign company or worker than an American one.
“As other countries delay implementation and secure side agreements and carveouts to protect their own companies, U.S. businesses will be hit by tax increases ultimately borne by American workers, savers and consumers.
Background: 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.
In early September, Senator Crapo and Representative Brady 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. Crapo and Brady 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.
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