Ways and Means Chair Tells Administration to Reject OECD Tax Deal
House Committee on Ways and Means Chairman Rep. Jason Smith, R-Mo., and the top Republican on the Senate Finance Committee, Mike Crapo of Idaho, said the administration shouldn't sign the current version of the international tax agreement, which would allow countries to collect taxes on firms unrelated to their physical presence in their countries. This is part of a two-part process in the Organization for Economic Cooperation and Development aimed at ending digital services taxes, which target U.S. tech giants.
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The Joint Committee on Taxation "estimates the U.S. will lose billions of dollars under this deal which overwhelmingly affects American companies. Moreover, according to JCT, this deal would 'increase complexity,' undermine 'tax sovereignty,' introduce 'distortive behaviors,' and create 'inefficient incentives.' Those terms do not inspire confidence that this deal would provide American companies greater tax certainty and stability -- especially given concerns that the deal’s definition of prohibited discriminatory taxes is 'too narrow, limiting, and susceptible to circumvention.'
"Make no mistake, we oppose discriminatory taxes targeting American companies. However, the bad behavior of foreign countries imposing them should not be rewarded by accepting a deal that reduces U.S. revenue, undermines our tax sovereignty, and fails to provide more stability to boost American companies in the global marketplace. We encourage the Biden Administration to redouble its efforts to negotiate -- with robust congressional consultation -- a good deal for American workers and businesses."