Missouri Congressman Jason Smith, who heads the House Committee on Ways and Means, criticized US President Joe Biden's tax deal Friday, saying it would harm the country's interests.
In a letter to the OECD, Smith stated that the organization's support for the U.T.PR would harm the US' interests by allowing foreign companies to take advantage of the country's tax laws.
New from me: Jason Smith is decidedly not a fan of the OECD tax deal, warning of potential tax and trade countermeasures. Tricky road ahead. https://t.co/VtYt3cCaiZ
— Richard Rubin (@RichardRubinDC) February 10, 2023
In the letter, Smith noted that the proposed tax would be ineffective against companies that are backed by the Communist Party of China. Instead, it would target various US tax incentives.
The U.T.PR allows countries to impose higher taxes on the subsidiaries of multinational corporations that are paying less than the country's proposed minimum tax rate. This is part of the Organization for Economic Cooperation and Development's (OECD) plan to combat tax avoidance by large organizations.
In October 2021, more than 130 countries agreed to implement a 15% global standard tax starting in 2023. This would affect US companies operating in other nations even if Congress did not pass the new tax.
When Democrats took over the Senate and House in the previous Congress, Biden pushed for the adoption of the global minimum tax. As a result, Congress enacted a different 15% tax, which is higher than President Donald Trump's 10.5% global tax.
In his letter to the OECD, Smith noted that the US contributes around 20% of the organization's budget, which is more than twice as much as any other nation. However, China provides no financial support to the organization. Despite this, China is expected to gain market share and jobs as a result of the U.T.PR, and American taxpayers are expected to pay the bill.
The preceding article is a summary of an article that originally appeared on Daily Caller