Report on recent US international tax developments — 17 May 2024

US Senate Finance Committee Chairman Ron Wyden (D-OR) said on 16 May that he is still working with Majority Leader Chuck Schumer (D-NY) to bring the House-passed Tax Relief for American Families and Workers Act (H.R. 7024) child tax credit and Tax Cuts and Jobs Act (TCJA) pre-cliffs bill to the floor of the Senate. This came after he was unable to add the bill to the FAA reauthorization and taxes legislation. Chairman Wyden also pointed to a recent Congressional Budget Office (CBO) report that found the cost of extending the TCJA provisions was considerably higher than a May 2023 estimate, a further issue for those in Congress who want to extend TCJA measures beyond their 2025 expiration.

The Finance Committee Chairman also said international tax and the OECD BEPS Pillar Two agreement will be an important part of the 2025 debate.

On the House side, recall that House Ways and Means (W&M) Committee Chairman Jason Smith (R-MO) and Tax Subcommittee Chairman Mike Kelly (R-PA) in late April announced the formation of 10 Committee Tax Teams that will be comprised of W&M Committee Republicans. The purpose will be to "study key tax provisions from the 2017 Trump tax cuts that are set to expire in 2025" and identify other legislative measures that support the Republican agenda.

Also this week, White House National Economic Advisor Lael Brainard offered more insights into the Biden Administration's position on tax policy in a 10 May speech on the "Tax Debate Ahead." The Administration official not only called for paying for TCJA tax cuts that are extended but also recommended using the "2025 tax debate as an opportunity to meet our national needs by raising revenue overall" through tax increases on the wealthy and large corporations. Reiterating prior Administration statements, Brainard listed proposals to increase the corporate tax rate to 28%, the corporate alternative minimum tax rate to 21%, and the stock buyback tax to 4%. Brainard also restated the President's pledge for no tax increases on those earning less than $400,000.

In contrast to President Biden's tax increase proposals, former President Trump on 11 May called for additional tax cuts if he wins a second term as President. The former President and presumptive 2024 Republican nominee for President said, "Instead of a Biden tax hike, I'll give you a Trump middle class, upper class, lower class, business class big tax cut."

The National Economic Advisor also pointed to the Administration's support for the OECD/G20 Inclusive Framework global tax agreement, saying it "will finally address the race to the bottom in corporate taxes, while enabling businesses to compete and allocate capital based on workforce talent and market factors instead of tax minimization strategies." She further said, "Many of the world's largest economies are implementing this transformational agreement. It is critical that we join them in 2025."