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The Section 899 provision that was nixed would have allowed the
federal government to impose taxes on companies with foreign
owners, as well as investors from countries judged as charging
“unfair foreign taxes” on U.S. companies.
The measure was expected to lead many companies to avoid
investing in the U.S. out of concern that they could face steep
taxes. But the removal of the provision adds a wrinkle to
Republicans’ plans to try to offset the cost of the massive
package.
Bessent said in an X post that he made the request to lawmakers
after reaching an agreement with other countries on the
Organization for Economic Co-operation and Development Global
Tax Deal. He said that after “months of productive dialogue,”
they would “announce a joint understanding among G7 countries
that defends American interests.”
Senate Finance Committee Chairman Mike Crapo, R-Idaho, and House
Ways and Means Committee Chairman Jason Smith, R-Mo., said they
would remove the provision. But, they noted, “Congressional
Republicans stand ready to take immediate action if the other
parties walk away from this deal or slow walk its
implementation.”
The removal of the provision will provide “greater certainty and
stability for the global economy and will enhance growth and
investment in the United States and beyond,” Bessent said in his
post.
An analysis by the Global Business Alliance, a trade group
representing international companies such as Toyota and Nestlé,
estimates that the provision would have cost the U.S. 360,000
jobs and $55 billion annually over 10 years in lost gross
domestic product.
The Global Business Alliance was among several groups that
signed a letter addressed to Senate Majority Leader John Thune,
R-S.D., and Crapo warning of the consequences of Section 899.
Republicans are rushing to finish the package this week to meet
the president's Fourth of July deadline for passage.
Earlier Thursday, the Senate parliamentarian advised that a
Medicaid provider tax overhaul central to the spending bill does
not adhere to the chamber’s procedural rules, delivering a
crucial blow to Republicans, who are counting on big cuts to
Medicaid and other programs to offset trillions of dollars in
Trump tax breaks.
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