Trump's new tax plan sparks corporate uproar in Washington
Dozens of executives from major global corporations are travelling to Washington, to voice opposition to President Trump’s proposed tax hikes on foreign investments in the United States. They warn the move could threaten millions of American jobs.
Tensions among American and international businessmen rise amid the President's new tax reform. Donald Trump's spending plan includes a controversial provision for a new tax that could impact foreign investors in the U.S. Section 899, known as the "retaliation tax," is causing concern on Wall Street and could affect future investments.
The bill passed by the House of Representatives contains a provision for a new tax of up to 20 percent on foreign investments in the United States. According to CNBC, the measure is intended as a response to what are described as "unfair taxes" imposed by foreign governments on American firms.
Investors, American companies with foreign capital, and international companies are raising concerns about the effects of implementing the Trump administration's idea and are taking action.
Jonathan Samford, president of the Global Business Alliance, informed the Financial Times that delegates from around 70 companies are scheduled to meet with members of Congress this week, with Section 899 expected to be the primary focus of their discussions.
The prospect of increased taxation has raised concerns among nearly 200 foreign companies represented by a U.S.-based lobbying group, including major firms such as Shell, Toyota, SAP, and LVMH. Many are worried about potential consequences for the 8.4 million jobs they support across the United States, according to the Financial Times.
"I think there is growing momentum to get rid of this provision in the Senate. Senators recognise that it’s counter-productive to the economic vision for the administration, which has made a big point about trying to get more investment to the US," said Samford to the Financial Times.
Section's 899 aim
Section 899 authorises the United States to increase existing fees by 5 per cent each year for countries deemed to impose unfair taxes, capping the total increase at 20 per cent, according to CNBC.
Additionally, the provision broadens the scope of the BEAT tax, which is designed to curb profit shifting to foreign jurisdictions as a means of tax avoidance. According to the Tax Foundation, the measure would impact nearly all companies operating in the U.S. that are headquartered abroad.
Source: Financial Times, CNBC
