Congressional Republicans Criticize Treasury Department’s Failure

US Department of the Treasury

U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho), U.S. Senate Foreign Relations Committee Ranking Member Jim Risch (R-Idaho) and U.S. House Ways and Means Republican Leader Kevin Brady (R-Texas) yesterday led Congressional Republicans in criticizing the Treasury Department’s failure to defend U.S. business and economic interests in international tax negotiations.

In a letter to Treasury Secretary Janet Yellen, the members call out the Administration for encouraging foreign countries to tax U.S. companies in a manner inconsistent with existing tax treaties, and once again urge Treasury to engage in meaningful, bipartisan consultation with Congress.  The letter emphasizes that despite the Administration’s assurances that Congress will capitulate on the agreement, it does not speak for Congress, particularly given the incoming Republican control of the U.S. House of Representatives.

From the letter:

For the past two years, the Biden Administration has routinely made commitments in the OECD negotiations it has no authority to fulfill.  Despite Treasury’s actions to date, it cannot dictate U.S. tax law or compel Congress to act… While some may believe that implementation by foreign countries of the model rules, including the UTPR, will lead the United States to follow suit, Congress’s hand will not be forced.  Nor will Congress sit idly by as U.S. companies and profits are taxed in a manner inconsistent with U.S. law and our bilateral tax treaties.

 

The Administration cannot continue to ignore the fundamental problems with the Pillar Two Agreement, concerns that have been raised with growing frequency in the United States and abroad.  While the Administration may treat these Rules as final, we do not.  And while foreign countries, and even Treasury, have threatened that U.S. companies will be subject to foreign tax under the UTPR, Congress has shown united opposition to extraterritorial taxes in the past and a willingness to respond to such measures.

The members have consistently raised a number of concerns with the Administration on the global minimum tax rules, and have requested robust consultation with Treasury to address these issues.  Treasury has failed to provide any meaningful feedback or consultation.

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The letter, found here, is signed by all Republican members of the Senate Finance Committee and House Ways and Means Committee, as well as Senate Foreign Relations Committee Ranking Member Risch.

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