Rep. Miller, Colleagues Introduce the Unfair Tax Prevention Act

WASHINGTON, D.C. – Today, Congresswoman Miller (R-WV) joined Congressman Ron Estes (R-KS), Ways and Means Committee Chairman Jason Smith (R-MO) and eight other colleagues in the introduction of the Unfair Tax Prevention Act. This legislation will prevent U.S. jobs and tax revenues from being surrendered to foreign governments through the Organisation for Economic Co-operation and Development (OECD)’s Pillar 2 also known as the Under Taxed Profit Rule (UTPR) surtax.

If foreign countries issue the UTPR surtax on American businesses and taxpayers, under the Unfair Tax Prevention Act the United States will impose reciprocal tax measures on the foreign country for as long as the unnecessary UTPR surtax remains in place.

Click here for bill text.

"Republicans in Congress reject the premise that foreign governments and organizations should be dictating how Americans are taxed in America," said Congresswoman Miller. "As I’ve previously warned, countries that implement the UTPR will feel the repercussions of their bad tax policies. The Unfair Tax Prevention Act stands up for American businesses and tax payers by ensuring companies from country’s that target U.S. businesses will feel the pain more than ours do." 

“After repeated objections from policymakers, including myself, and business leaders, the Biden administration has negotiated a deal with the OECD that has a disproportionately negative effect on the United States and our economic competitiveness,” said Congressman Estes. “Building on the Defending American Jobs and Investment Act, introduced by Ways and Means Republicans, this legislation protects the U.S. tax base from unfair extraterritorial taxes by foreign countries – and imposes stiff penalties on those countries if they implement them. It’s time for the OECD and foreign countries to abandon the UTPR surtax and its fundamental flaws.”

“Congressional Republicans are not going to turn a blind eye to other countries – emboldened by the Biden Administration's dangerous and misguided policies – targeting U.S. companies with higher taxes that will destroy U.S. jobs and steal U.S. revenues,” said Ways and Means Committee Chairman Smith. “Nor will we allow foreign entities – including companies controlled by the Chinese Communist Party – to exploit those circumstances to gain an unfair competitive advantage against American workers and job creators. It is particularly shameful that the deal the Biden Administration has cut at the OECD does nothing to hold China accountable or ensure it will not cheat under this new global tax scheme. This week’s announcement by the OECD that it’s delaying the deadline for implementation is a clear sign that other countries are realizing that while the Biden Administration may be interested in colluding with them to raise taxes on American businesses, the Congress that actually writes tax law in our country is not on board. This legislation is the next and necessary step to defend American sovereignty and jobs from the Biden Administration’s global tax surrender.”

Congresswoman Miller was joined by the following Members in the introduction of the Unfair Tax Prevention Act: Rep. Ron Estes (R-KS), Chairman Jason Smith (R-MO), Rep. Mike Kelly (R-PA), Rep. Adrian Smith (R-NE), Rep. Vern Buchanan (R-FL), Rep. Randy Feenstra (R-IA), Rep. Beth Van Duyne (R-TX), Rep. Lloyd Smucker (R-PA), Rep. MIchelle Steel (R-CA), and Rep. Blake Moore (R-UT).

Background:
The Unfair Tax Prevention Act -

• Defines “foreign-owned exterritorial tax regime entities” (FETR) as foreign-controlled entities with extraterritorial taxes including the UTPR surtax targeted at U.S. jobs and businesses.
• Strengthens anti-avoidance rules in the U.S. base erosion and anti-abuse tax (BEAT), by eliminating the 3% base erosion floor and the $500 million gross receipts test for FETR entities.
• Revokes the ability of FETR entities to disregard certain 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.