WASHINGTON – Yesterday Rep. Ron Estes (R-Kansas) offered remarks condemning the detrimental OECD Pillar 2 tax scheme during a Ways and Means Committee markup of H.R. 3938 – the Build It in America Act.
"As representatives of our districts, we should be seeking policies that put America first and defend our job creators and innovators," said Rep. Estes. "Yet the provisions from the OECD’s Pillar 2 punish American workers and corporations through their Global Minimum Tax scheme."
"If any country is thinking about imposing a discriminatory tax on the United States, we will be ready to tax them back," Rep. Estes said in closing. "The Kansans I represent need tax relief and economic growth and stability – not for their hard-earned dollars to be shipped off to foreign countries through detrimental tax schemes from the OECD."
The Biden Administration has repeatedly made commitments to the OECD that are out of its prerogative to both make and fulfill. The Committee on Ways and Means has led the way in pushing back against these efforts and reminding Treasury of Congress’ authority when it comes to trade. Last year Rep. Estes joined Ways and Means colleagues in a letter to Treasury expressing their concerns and detailed the pitfalls of the Pillar 2 deal in an op-ed in The Hill and a letter to the editor of Tax Notes.
Download Rep. Estes’ testimony in committee
Full Remarks:
I’d like to talk a little bit more about the committee’s jurisdiction and history.
The U.S. Constitution states, "All Bills for raising Revenue shall originate in the House of Representatives."
That’s us. We’re here because the Constitution that we all swore to uphold gives us that responsibility. The Ways and Means Committee actually has a reference in the Constitution because our founders understood the importance of taxation. So it’s concerning to me that the Biden administration would use negotiators and bureaucrats to cede that responsibility to foreign countries.
Mr. Chairman, I’d like to submit for the record my letter to the editor of Tax Notes that goes into greater detail about the failings of these tax schemes titled, “OECD Pillar 2 Is a Bad Deal for America.”
As representatives of our districts, we should be seeking policies that put America first and defend our job creators and innovators. Yet the provisions from the OECD’s Pillar 2 punish American workers and corporations through their Global Minimum Tax scheme.
The data is clear – according to JCT, global implementation of the Global Minimum Tax as defined by Pillar 2 will cost the United States $120 billion in lost tax revenue. And if the United States is forced to change its tax code to comply with the Pillar 2 provisions, we’ll still lose $58 billion in revenue.
And who benefits? The foreign countries looking to pad their coffers with U.S. tax dollars.
Implementing Pillar 2 will result in higher costs, fewer jobs and less economic opportunity for millions of American families. Under the Treasury/OECD plan, there will be a drastic impact on U.S. companies operating overseas, with some U.S. companies being double or even triple-taxed. This will cause lower tax revenue for the United States Treasury, job losses for our workers and decreased investment in the United States.
Compare this to the Tax Cuts and Jobs Act of 2017. My Democrat colleagues like to pretend this was a failure, but facts don’t lie – it created real economic growth for countless Americans, especially middle-class workers. And we prevented companies from headquartering overseas, our corporate tax revenue has increased, millions of jobs were created and there’s not been a single major inversion since the Tax Cuts and Jobs Act passed.
Republicans have a proven track record of helping American workers, innovators and job creators, but President Biden and Secretary Yellen continue to work with the OECD against American interests to impose a global minimum tax which has resulted in the egregious Undertaxed Profits Rule, or UTPR.
Chairman Smith has already introduced legislation to combat these extraterritorial and discriminatory taxes. It’s a good start, but I’m ready to see this go further.
If any country is thinking about imposing a discriminatory tax on the United States, we will be ready to tax them back.
The Kansans I represent need tax relief and economic growth and stability – not for their hard-earned dollars to be shipped off to foreign countries through detrimental tax schemes from the OECD. It is my hope that my colleagues across the aisle will see the light and help us oppose this bad deal.
