Finance Republicans Demand Treasury Analysis of OECD Agreement
Biden Administration’s failure to substantiate revenue and implementation claims raises serious concerns regarding U.S. competitiveness
Washington, D.C.--U.S. Senate Finance Committee Republicans, led by Ranking Member Mike Crapo (R-Idaho), wrote to Treasury Secretary Janet Yellen renewing requests for information regarding international tax negotiations. To date, Treasury has been unwilling or unable to fully engage with Congress to provide details on the negotiations, which will have a significant impact on American workers, businesses and revenue.
The senators raise concerns with how the negotiations may negatively impact U.S. competitiveness; the commitment from the United States to increase its global minimum tax before any other country; and suggestions that Treasury could implement the agreement without the advice and consent of the Senate, bypassing the treaty process.
From the letter:
“The Administration’s rush to reach a political agreement, tied to its domestic spending plans and pursuit of revenue, has come at the expense of thorough analysis and meaningful engagement with Congress and the business community, and may ultimately put U.S. businesses at risk. . . . Given this agreement’s potential to jeopardize U.S. competitiveness, we continue to have concerns with the lack of detail underlying the approach being proposed under Pillar One and its lack of foundation in any discernible tax principles.
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"Further troubling is Treasury’s continued insistence that the United States once again move first by significantly increasing the U.S. global minimum tax. . . . As Pillar Two does not require other countries to adopt a global minimum tax, we are not confident that our biggest foreign competitors, like China, will enact and implement a global minimum tax on the same terms or on the timeline agreed to at the OECD.
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"Finally, precedent indicates that any multilateral tax agreement that achieves the stated goals of Pillar One would need to be submitted to the Senate as a treaty, yet Treasury suggests that the United States could fully implement Pillar One without the advice and consent of two-thirds of the Senate through the treaty process. . . . . [A]ny suggestion that Pillar One can be implemented absent treaty ratification is a dramatic shift from past precedent and calls into question the binding nature of any such agreement, thereby threatening the very tax certainty that many of our companies, and this Administration, claim to seek under Pillar One."
The senators end the letter with a detailed list of questions regarding the proposals, reiterating that any opportunity for a bipartisan outcome will require greater transparency and engagement from Treasury.
All Republican members of the Finance Committee signed the letter: Mike Crapo (R-Idaho, Ranking Member), Chuck Grassley (R-Iowa), John Cornyn (R-Texas), John Thune (R-South Dakota), Richard Burr (R-North Carolina), Rob Portman (R-Ohio), Pat Toomey (R-Pennsylvania), Tim Scott (R-South Carolina), Bill Cassidy (R-Louisiana) , James Lankford (R-Oklahoma), Steve Daines (R-Montana), Todd Young (R-Indiana), Ben Sasse (R-Nebraska), John Barrasso (R-Wyoming).
Full text of the letter can be read here.
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