Tax Battle Heats Up: U.S. Lawmakers Clash Over Controversial Proposal

U.S. Treasury Secretary Scott Bessent on Thursday called on Republicans to eliminate a proposed "retaliatory tax" aimed at foreign investors from their comprehensive budget legislation. This proposal has sparked concerns on Wall Street, with warnings from fund managers and venture capital firms about possible disruptions in already jittery financial markets.

Dubbed "Section 899," the measure could allow President Trump to levy taxes up to 20% on investors from countries imposing "unfair" taxes on U.S. firms. Trump appealed to lawmakers to advance the unfinished bill, which aims to extend his 2017 tax cuts and increase spending on border security and the military, adding approximately $3 trillion to national debt.

While Trump pushed for a July 4 deadline, several Senate Republicans struggled to resolve issues in the bill. The nonpartisan Congressional Budget Office projected the House version would increase debt by $2.8 trillion over the next decade. Republicans and Democrats remain divided, particularly over elements affecting healthcare funding and tax provisions.

(With inputs from agencies.)