Yesterday, Congresswoman Carol Miller (R-WV) joined all Ways and Means Republicans and U.S. House Republican leadership in sending a letter to the Organization for Economic Co-operation and Development (OECD). The letter warns that the Biden-Harris administration’s collaboration with foreign governments of the OECD would impose a global minimum tax on U.S. businesses. It highlights concerns about subjecting U.S. employers to a new undertaxed profits rule (UTPR), surrendering U.S. sovereignty, forfeiting over $100 billion in tax revenue, and violating Constitutional principles by attempting to coerce Congress into implementing a deal that the Administration has no authority to enforce.
Joining Congresswoman Miller in sending the letter were House Speaker Mike Johnson (R-LA), House Majority Leader Steve Scalise (R-LA), House Majority Whip Tom Emmer (R-MN), House Republican Conference Chair Elise Stefanik (R-NY), Ways and Means Committee Chairman Jason Smith (R-MO), and all Ways and Means Committee Republicans.
“Implementation of the UTPR and other OECD policies would force the United States to forfeit $120 billion in revenue to foreign governments while offering competitive advantages to China and others,” said House Republican Leadership and Ways and Means Republicans. “Ultimately, the Biden-Harris administration lacks the authority to impose any tax deal on Americans without the approval of the U.S. Congress – doing so would violate the United States Constitution…The United States Constitution expressly grants the taxing power to Congress, not to the President. Specifically, the U.S. Constitution requires that ‘[a]ll bills for raising revenue shall originate in the House of Representatives.’ This constitutional structure makes the Committee on Ways and Means, the tax-writing committee in the U.S. House of Representatives, the only entity where changes in U.S. tax law may originate. Thus, the Biden-Harris administration’s unilateral negotiations without consultation with Congress constitutes a major overstep of its authority, with dire consequences for American workers and businesses.”
In addition to circumventing Congressional authority, this policy puts American workers and businesses at a competitive disadvantage against countries like China who have already indicated a willingness to exploit loopholes.
“China will exploit the OECD global tax deal’s loophole for direct government subsidies, which are a hallmark of Chinese economic activity. Other countries will likely do the same, thwarting OECD’s stated purpose of ensuring a minimum level of taxation," continued House Republican Leadership and Ways & Means Republicans' statement "Ultimately, UTPR will target U.S. workers and businesses by allowing foreign governments to claw back important U.S. tax incentives (e.g., tax credits for research & development & low-income housing) & attack operations of American companies in third-party jurisdictions...And even if a country like China were to move forward, there is no assurance that CCP would play by rules."
The letter expresses support for a lawsuit filed by American Free Enterprise Chamber of Commerce challenging UTPR & states that should OECD proceed with this aspect of global minimum tax deal along with Biden-Harris Administration & other countries – Congress will be forced pursue countermeasures protect US sovereignty fair treatment American workers businesses.
Today's action comes one year after Republicans on Ways & Means Committee traveled Paris France meet with OECD officials express opposition Biden-Harris Administration's unilaterally negotiated global tax surrender.
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