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Business & Economy

Business & Economy

The Big Story

Bessent calls for nixing ‘revenge tax’ in Trump bill

Treasury Secretary Scott Bessent asked House and Senate Republicans to scrap the “revenge tax” on foreign investments from their versions of President Trump’s sweeping tax bill.

© Greg Nash

In a post on the social platform X, Bessent said Thursday that he asked GOP lawmakers to strike Section 899, which would have imposed a tax of up to 20 percent on investments from countries with economic policies deemed unfair to U.S. businesses, from their legislation.

Bessent said the provision was no longer necessary after the U.S. and its partners in the G7 reached a “joint understanding … that defends American interests.”

He said the deal will “[preserve] our tax base” and that “OECD Pillar 2 taxes will not apply to U.S. companies.” OECD Pillar 2 is a global minimum tax agreement that the U.S. is a party to but that has not been domestically implemented so far.

The retaliatory tax in the Republican tax-and-spending cut bill specifically called out Pillar 2’s “undertaxed profit rule” (UTPR) as well as digital services taxes that could apply to U.S. tech giants.

The undertaxed profits rule allows U.S. subsidiaries of multinational companies to be taxed if their parent company isn’t taxed at the base rate of 15 percent.

The Hill’s Sylvan Lane and Tobias Burns have more here.

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