Press Releases

Today, Rep. Ron Estes (R-Kansas), joined by every Ways and Means Republican, reintroduced the Unfair Tax Prevention Act to discourage foreign countries from attacking U.S. jobs and tax revenues through the Organization for Economic Co-operation and Development (OECD)’s Pillar 2 so-called Under Taxed Profit Rule (UTPR) surtax. The bill ensures that if a country moves forward with a UTPR surtax on American workers and businesses, the United States will impose a reciprocal tax measure that will apply as long as the foreign country's unfair tax remains in place.
 
"When it comes to international taxes, the United States should put American businesses and the U.S. Treasury first – a departure from the Biden administration's policies of putting America last," said Rep. Estes. "The OECD and their so-called Under Taxed Profit Rule in Pillar 2 is a disgraceful surtax that disproportionately impacts U.S. job creators and our country's economic competitiveness by targeting our companies for foreign treasuries' gains. Ways and Means Republicans stand behind President Trump, who has clearly stated that he will protect American interests in any global tax negotiations, in defending our tax base from unfair extraterritorial taxes by foreign countries. Our allies and partners should take note – abandon the UTPR surtax."
 
Background
The Unfair Tax Prevention Act defends Americans from unfair taxation by foreign countries with a reciprocal tax measure for any country that decides to target Americans under the guise of the OECD deal:

• Defines "foreign-owned extraterritorial tax regime entities" (FETR entities) as foreign-controlled entities connected with entities operating in jurisdictions with extraterritorial taxes aimed at U.S. business operations, including the UTPR surtax. 
• Strengthens anti-avoidance rules in the U.S. base erosion and anti-abuse tax (BEAT), by eliminating the 3% base erosion percentage floor and the $500 million gross receipts test for FETR entities.
• Revokes the ability of FETR entities to disregard certain service payments and payments subject to withholding taxes, and treats 50% of cost of goods sold as a base erosion tax benefit.
• Accelerates the scheduled BEAT rate increase and tax credit changes for FETR entities.

For years Rep. Estes has been sounding the alarm and pushing back against the OECD’s global tax scheme, and outside organizations, like the Federation of German Industries (BDI) and the American Free Enterprise Chamber of Commerce, agree. Earlier this week, he commented on reports that Treasury delivered a memo to the White House in response to President Donald Trump's Jan. 20 executive action on OECD. In January, Rep. Estes praised President Trump’s executive actions rejecting the OECD tax deal. On that same day, he also joined Ways and Means Chairman Jason Smith (R-Missouri) in introducing the Defending American Jobs and Investment Act. Earlier that month he published an op-ed in London’s Telegraph outlining U.S. opposition to the OECD deal. He previously published an op-ed with MP Priti Patel on the OECD Pillar Two tax scheme, led a letter to Treasury demanding accountability and traveled with Ways and Means colleague to Germany and France to discuss Pillar Two with European leaders. He also introduced legislation to impose reciprocal taxes on countries that use the OECD deal to impose unfair taxes on U.S. business and raid the U.S. tax base in the last Congress. Earlier, he penned an op-ed in The Hill outlining the concerns with the OECD deal and published a Bloomberg op-ed with Rep. Randy Feenstra (R-Iowa) highlighting how the OECD tax deal would harm the United States.