As negotiations between Congress and the Biden Administration on the debt limit conclude, another heated debate over international tax policy is also unfolding. House lawmakers are increasingly concerned that the Biden Administration is not doing enough to negotiate a good deal for the United States regarding a new Organization for Economic Co-operation and Development (OECD) plan to reform the international tax system. Specifically, they believe the Department of the Treasury (USDT) has not adequately consulted with Congress about the OECD plan, which could undermine American sovereignty and harm American taxpayers. Congress has justification and should take appropriate action to safeguard American interests.
For decades, the international community has debated how best to reform the global tax system amidst accusations that large multinational enterprises (MNEs) are exploiting “gaps and mismatches between different countries’ tax system” to avoid paying high taxes. In 2021, 138 countries, including the U.S. under the Biden Administration, signed a new two-part tax deal designed to restore a “level playing field” and ensure that these companies pay their fair share. This tax deal would allegedly accomplish these objectives by establishing new model rules under what are collectively known as Pillars I and II or the Two-Pillar plan.
This article was published in the Economic Standard here.
Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us on www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.