Representative Aaron Bean (R-FL) joined the House Ways and Means Committee in introducing a bill that would use reciprocal taxation to counter unfair taxes foreign countries place on American businesses.
Rep. Bean's legislation is named the "Defending American Jobs and Investment" Act. It would require the Department of the Treasury to identify unfair and discriminatory taxes foreign countries place on American businesses, such as the Undertaxed Profits Rule (UTPR).
The Undertaxed Profit Rule is part of the Organization for Economic Co-operation and Development's (OECD) Global Tax Deal, which would allow countries to increase taxes on a business if that business is part of a larger company that pays less than the proposedĀ global minimum taxĀ of 15 percent in another jurisdiction.
In other words, if a company is not paying the global 15% corporate tax rate in its home country, other countries can impose more taxes on that company to even it out.
The Biden Administration had been negotiating entry into the system by 2025, which the Joint Committee on Taxation estimated would cost the U.S. $120 billion in lost tax revenue at worst and nearly $60 billion at best until President Trump canceled the U.S.'s entry via executive order.
As a result, Rep. Bean's bill retaliates against the proposal by increasing the tax rate on the U.S. income of wealthy investors and corporations in those foreign countries by 5% every year for four years. Taxation rates will remain at 20% until the foreign country repeals the tax laws targeting American companies through the UTPR and other discriminatory taxes.
In his press release, the Florida Congressman said, "The Biden-Harris administration's global minimum tax scheme was a bad deal for America. It would have hurt our economy and destroyed U.S. jobs while serving to enhance China's competitive advantage. With this bill, we are taking the next and necessary step to protect our sovereignty, restore our economic strength, and put America first."
