Top executives from major multinational corporations are arriving at Capitol Hill this week to lobby against the implementation of a key tax proposal in President Donald Trump's "big, beautiful bill."
What Happened: Section 899 of the proposed tax package, targeted to raise $116 billion over the next decade, would authorize the U.S. to levy higher taxes on investors and companies from nations deemed to impose unfair tax burdens on American businesses, the Financial Times reports.
Representatives from nearly 70 companies, including Shell PLC SHELL, SAP SE SAP, Toyota Motor Corporation TM and LVMH Moët Hennessy Louis Vuitton LVMHF, are set to meet with lawmakers to advocate for the removal or revision of the provision.
Jonathan Samford, president of the Global Business Alliance, said Section 899 is "a central topic," adding, "I think there is growing momentum to get rid of this provision in the Senate."
The Institute of International Bankers (IIB) is also arranging visits with Treasury officials and Senate Republicans. Beth Zorc, IIB CEO, said, "As passed by the US House of Representatives, Section 899 will stifle foreign direct investment, risk financial market disruptions, and endanger American jobs in states and communities across the country."
Why It Matters: Section 899 would increase taxes by 5% annually over four years on dividends and interest paid to foreign investors, and for the first time would tax portfolio holdings of sovereign wealth funds. The policy would impact countries like the UK, Canada, Australia, and EU member states.
According to the IIB, foreign banks lent more than $1.3 trillion to U.S. businesses in 2023. Their support backed $5.4 trillion in direct investment from foreign companies and generated $270 billion in revenue. A change in tax policy may lead this capital to dry up or move elsewhere.
Jason Smith, chair of the House Ways and Means Committee, said in defense of the policy: "This is a way to help put them in check so that they understand that if they do that to US businesses, there will be consequences for their actions. Hopefully it'll never take effect."
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