By Bernie Becker 04/08/2021 06:49 PM EDT
Republicans on the House Ways and Means Committee said Thursday that they were worried about how the Biden administration was handling global tax negotiations and requested a briefing from the Treasury Department about the talks.
“We are concerned that the OECD changes could directly reduce U.S. tax revenues and also leave the door open to other countries’ continued attacks on U.S. companies and our domestic tax base,” 17 Republicans on the tax-writing panel wrote to Treasury Secretary Janet Yellen.
Yellen gave a speech this week endorsing a global minimum tax, one of the two pillars at the center of the talks being run through the Organization for Economic Cooperation Development.
The Biden administration also offered a new proposal this week on arguably the more complicated pillar in the negotiations, which seeks to figure out how and among which countries to allocate the profits of multinational corporations for taxation.
What now? Top lawmakers in both parties have said for years that they want to ensure that U.S. companies are protected, both during the OECD talks and from unilateral digital taxes from other countries.
But the newest letter from the Ways and Means Republicans goes even further, arguing that the OECD blueprints developed on those two pillars contained “significant departures from accepted international tax principles.”
The OECD released those blueprints during the Trump administration, which was particularly interested in finding a deal for a global minimum tax.
But the GOP tax writers expressed concern that the existing minimum tax in the U.S., the levy on Global Intangible Low- Taxed Income, wouldn’t be grandfathered into a global deal. President Joe Biden has proposed doubling the GILTI rate to 21 percent, and the Republicans warned the Biden administration against allowing other countries to set lower minimum tax rates.
They also worried that negotiators would fall short on a plan changing how and where multinationals’ profits are taxed, which would open up U.S. digital companies to further unilateral taxes from other countries. Rep. Kevin Brady of Texas, the top Republican on Ways and Means, separately told reporters on Thursday that he wasn’t familiar enough with the Biden administration’s proposals this week on that pillar to comment.
Top OECD officials have suggested that the U.S. proposals could gain support from other countries, but it’s not clear yet how they will be received in other world capitals.
Rep. Mike Kelly of Pennsylvania was the only Ways and Means Republican not to sign Thursday’s letter. Brian Faler contributed to this report.