U.S. Moves to Block Billions Heading Overseas with Tax Reform
The U.S. Treasury Secretary Scott Bessent discussed the Republican tax bill aimed at retaining corporate tax payments within the U.S. The scheme, known as the One Big Beautiful Bill Act, intends to mitigate foreign collection of taxes from U.S. firms, potentially generating an additional $116 billion over a decade.
- Country:
- United States
In a significant economic maneuver, U.S. Treasury Secretary Scott Bessent has voiced support for the Republican tax and spending bill, portraying it as a pivotal tool to retain corporate tax payments within American borders. This legislative effort, dubbed the One Big Beautiful Bill Act, is positioned as a countermeasure to prevent other nations from siphoning off taxes from U.S. businesses.
The bill stands against the backdrop of the global minimum corporate tax, known as Pillar Two, which many countries are adopting. According to Bessent, the U.S. aims to assert its fiscal independence and retain hundreds of billions of dollars that might otherwise bolster foreign treasuries.
A controversial component of this legislation, Section 899, proposes applying up to a 20% tax on foreign investors' U.S. earnings, challenging the fairness of international tax norms like digital service taxes. However, while this could boost U.S. tax revenues by $116 billion over ten years, it has sparked debates on its possible impacts on U.S. investment appeal.
(With inputs from agencies.)
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