Latest news with #revengetax
Yahoo
4 days ago
- Business
- Yahoo
Senate Delays and Scales Back ‘Revenge Tax' in Trump Bill
(Bloomberg) -- Senate Republicans plan to delay and make less onerous a levy targeting foreign companies and investors from countries that the US determines have been unfairly taxing US companies. As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space As American Architects Gather in Boston, Retrofits Are All the Rage The provision, officially known as Section 899 and informally known as the 'revenge tax,' was drafted by House Republicans and supported by the White House to counter several European countries, Canada, Australia and more nations from taxing US firms in a way those lawmakers argue is discriminatory. The Senate's version of the bill released late Monday would delay that new tax until 2027 for calendar-year filers and raise it by 5 percentage points a year until it hit a 15% cap. The House version of the tax would take affect sooner and rise to 20% over four years on individuals and firms from targeted countries, raising an estimated $116 billion over 10 years help offset the rest of the President Donald Trump's massive tax and spending package. The tax has sparked fears on Wall Street that it could make it much harder for foreign individuals and companies to invest in the US. The levy targets allies that have digital services taxes on US tech companies, as well as countries imposing a global minimum tax on corporations. Defenders of the tax, including Republican Representative Ron Estes of Kansas, have said the provision is simply intended to address foreign countries seeking to 'pilfer our tax base' by unfairly taxing US companies. 'Section 899 is a tax and a tool that will only be used if foreign countries willfully disregard US tax sovereignty in their efforts to inflate their treasuries,' he wrote. Estes urged people unhappy with the tax to lobby their governments to repeal discriminatory taxes. Treasury Secretary Scott Bessent has also defended the proposal, testifying to Congress that it's designed to prevent foreign countries from draining US multinational companies with hundreds of billions of dollars in extra taxes. Market reaction has so far been limited, in part due to uncertainties over how the provision will ultimately take shape. There is little sign that foreign investors are retreating from US bond markets, and the S&P 500 is not far from the record high set in February. But investors are concerned about the unintended consequences and the signaling effect of Section 899. Some bond holders have been spooked by a lack of clarity about whether US government bonds could be taxed. The interest earned by non-US holders of US Treasuries isn't taxable by the US under what's known as the portfolio interest exemption. The Senate bill would exempt portfolio interest, per a summary released by the Senate Finance Committee. A footnote in a House report related to the bill states that Section 899 'does not apply to portfolio interest,' but that isn't mentioned in the House's version of Section 899 itself. Some investors say it amounts to a weaponization of US capital markets into law. The tax 'challenges the open nature of US capital markets by explicitly using taxation on foreign holdings of US assets as leverage to further US economic goals,' George Saravelos, head of currency research at Deutsche Bank AG, wrote in a report last month. JPMorgan Chase & Co.'s strategists expect the provision may weigh on high-dividend stocks, such as financial services and utilities, and compound the 'lingering concerns around investors' willingness to hold dollars.' --With assistance from Melissa Shin and Lauren Vella. American Mid: Hampton Inn's Good-Enough Formula for World Domination How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants The Spying Scandal Rocking the World of HR Software US Allies and Adversaries Are Dodging Trump's Tariff Threats As Companies Abandon Climate Pledges, Is There a Silver Lining? ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
4 days ago
- Business
- Bloomberg
Senate Delays and Scales Back ‘Revenge Tax' in Trump Bill
By and Ye Xie Save Senate Republicans plan to delay and make less onerous a levy targeting foreign companies and investors from countries that the US determines have been unfairly taxing US companies. The provision, officially known as Section 899 and informally known as the 'revenge tax,' was drafted by House Republicans and supported by the White House to counter several European countries, Canada, Australia and more nations from taxing US firms in a way those lawmakers argue is discriminatory.
New York Times
4 days ago
- Business
- New York Times
Business Lobbyists Scramble to Kill $100 Billion ‘Revenge Tax'
Business lobbyists are working to kill a measure in the Republican tax policy legislation that would punish companies based in countries that try to collect new taxes from American firms. The push comes as Senate Republicans are preparing to unveil their domestic policy bill on Monday, which will ultimately need to be passed and merged with the legislation that the House passed last month. That bill imposes a so-called revenge tax on foreign companies that try to enforce the terms of a 2021 global minimum tax agreement or impose digital services taxes on American technology companies. The legislation would substantially increase the tax bills for many foreign companies that operate in the United States, raising more than $100 billion over a decade. Critics argue that the provision would chill foreign investment at a time when the Trump administration is trying to attract international money. 'I think the president has been pretty unequivocal on where he stands on wanting more investment into the U.S. from international companies,' said Jonathan Samford, chief executive of the Global Business Alliance, which lobbies on behalf of international businesses in the U.S. Mr. Samford added that the measure 'directly contradicts the president's investment vision.' The legislation is poised to reignite international tax and trade wars that have been on hiatus as policymakers around the world grapple with how to overhaul the global tax system. It has also stoked anxiety among Wall Street investors and is expected to be a topic of discussion as leaders of the Group of 7 countries gather in Canada this week for a summit. Since taking office, President Trump has made clear that he wants nothing to do with a 2021 deal brokered by the Biden administration that aimed to rewrite the rules of how the world's largest companies would be taxed around the globe. That deal, which was agreed to by the G7, created a new global minimum tax rate of at least 15 percent that companies would have to pay, regardless of their headquarter location. The aim was to prevent countries from lowering their tax rates as a way to attract multinational corporations, creating a 'race to the bottom' in taxation that left nations with fiscal shortfalls. Want all of The Times? Subscribe.
Bloomberg
12-06-2025
- Business
- Bloomberg
Investor Anxiety Over ‘Revenge Tax' Is Overblown, Barclays Says
A controversial provision in President Donald Trump's tax-and-spending bill aimed at penalizing countries with 'unfair' tax regimes is unlikely to disrupt US bond and stock markets, according to Barclays Capital. Dubbed a 'revenge tax' by the finance community, Section 899 of the budget bill calls for increasing levies for individuals and companies whose home countries' tax policies the US deems 'discriminatory.' The proposal – which received House approval in May and is now under consideration in the Senate as part of the so-called One, Big Beautiful bill — has raised concerns on Wall Street that it may drive away foreign investors at a time when their confidence in US capital markets has already been shaken by the Trump administration's policies.
Wall Street Journal
07-06-2025
- Business
- Wall Street Journal
How to Avoid a ‘Revenge Tax'
Now that Congress has your attention, you may be wondering how to escape the supposed new 'revenge tax' lawmakers are writing. The proposal has stirred up considerable, although disingenuous, alarm in some quarters but rejoice: Escaping it is simple. We speak of Section 899, included in the House version of the budget bill now wending its way across Capitol Hill. It would create a retaliatory surtax with a maximum rate of 20% on nationals (individuals and companies) of countries that impose 'unfair foreign taxes' on U.S. businesses. A recent Wall Street-and-media freakout branded this a protectionist sledgehammer, but it's a narrowly tailored response to specific foreign tax overreaches. Congress is reacting to taxes other governments want to impose on American firms under the aegis of the Organization for Economic Cooperation and Development. Pillar one of the OECD's global corporate-tax project envisions new excess-profits taxes on the world's largest companies, mainly American and largely in tech and pharma. Europe's current crop of digital-services taxes are precursors. Pillar two imposes a 15% corporate alternative minimum tax globally, and allows other jurisdictions to impose 'top-up taxes' if a company's home country doesn't collect enough tax under the rules.
