U.S. Sen. Mike Crapo (R-ID) and U.S. Rep. Kevin Brady (R-TX) outlined their concerns about the Organisation for Economic Co-operation and Developmentʻs (OECD) tax digitization project leading up to Treasury Secretary Janet Yellenʻs upcoming meeting with G-20 finance ministers.
In a letter to Yellen, Crapo and Brady outlined three major concerns. One, they said the global minimum tax must be fair to American workers and companies – any special rates or exemptions offered to foreign competition must be available to Americans. Two, the global profit allocation formula, including any carve-outs and special inclusions, must not disproportionately affect Americans. Three, the targeting of American workers and companies by foreign governments must end immediately.
“There has been consistent bipartisan, bicameral support in Congress for the OECD as the appropriate venue to address the digitalization of the economy, potentially including changes to longstanding global tax rules. However, the OECD project would be counterproductive if the Administration’s negotiating position concedes ground to foreign counterparties and harms the U.S. economy,” Brady and Crapo wrote to Yellen. “Congressional support for an agreement at the OECD will hinge on protecting American workers and the U.S. tax base. Other countries have shown that they will aggressively seek to gain market share and strip away our tax base, so U.S. negotiators must be equally aggressive in defending American interests. The Administration should not surrender jobs, growth, or tax revenues to other countries in order to advance a partisan tax increase agenda at home.”
Crapo is the ranking member on the Senate Finance Committee, while Brady is the ranking member on the House Ways and Means Committee.
“With significant work needed before reaching a final OECD agreement, we reiterate the need for active consultation with Congress on the specific policy options and detailed analytics being considered,” they concluded.