University of Wyoming Lab School bill squeaks through committee
Senate File 126, 'Establishment of a K-8 public lab school,' comes after a set of 'unfortunate circumstances' between UW and ACSD1. A rupture over how to operate the school, which had been guided by a memorandum of understanding between the two bodies, led to a 'unilateral decision' by the UW Trustees, and a subsequent later announcement by the ACSD1 school board, to close the lab school at the end of this academic year, bill co-sponsor Sen. Chris Rothfuss, D-Laramie, explained to the committee.
But for over a century prior, the UW Lab school operated as a K-8 public school, offering practicum and observational experiences for pre-service teachers and other UW students.
'This had been a good working relationship governed by an MOU (between UW and ACSD1),' Rothfuss said.
However, as priorities changed, the school began operating less as a lab school and more like a public school on campus, he continued. Ultimately, that led the university to announce closure of the school.
Sen. Chris Rothfuss, D-Laramie, on Senate floor
Sen. Chris Rothfuss, D-Laramie, speaks during the morning session of the 68th Wyoming Legislature on Tuesday in the Senate chamber.
'The local delegation tried to reconcile, but that was unsuccessful,' Rothfuss said.
Nearly everyone who testified in committee Wednesday agreed that it was a sad decision to close the UW Lab School, but school district officials questioned who would foot the bill to keep the school open, and whether the school could be reorganized and kept open in time for next fall.
No one from the university or ACSD1 spoke in favor of SF 126 Wednesday. Tristan Green, chief financial officer for ACSD1 said that as written, the bill would require $2.5 million in district funding to keep the school open.
'You want this lab school to serve a state mission. If it's to serve a state mission, then why is one district being required to pay for it?' Green asked. 'Why not put it under the state, and allow the state to make this what it wants, not at the cost of one district?'
David Hardesty, ACSD1 assistant superintendent, asked for additional clarification on resource allocation, because as it stands, the district has already made the 'very difficult decision' to close the lab school, bringing its students into existing ACSD1 schools.
Decisions about the MOU governing the UW Lab School, he said, had at times forced the school district to 'funnel resources at a higher rate' into it than other schools, he continued. When faced with such challenges, the district ultimately decided to incorporate lab school students into its existing facilities.
'We do have the capacity to provide for those students in our current schools,' Hardesty said.
Mike Smith, vice president for Governmental Affairs and Community Engagement at UW, told the committee that he wanted to address the idea that UW made a 'rash decision' to close the lab school. Rather than being a rash decision, he said the university determined that the lab school was not contributing to the university's mission.
'We felt it was time to move on,' Smith said, adding that the UW College of Education has over 200 locations across the state where it can provide other practicum experience.
Nate Martin, an ACSD1 trustee, told the committee that many people in the community were upset when the university decided to close the lab school, and a 'Save the Lab School' movement did try to do just that.
'We tried to approach the university, and they have their reasons for not wanting to move forward. But in the intervening months, as the process continued, it became clear that whatever we did, whatever resulted, was not going to be the lab school anymore,' Martin said.
Martin called SF 126 a 'Save the Lab School' bill, but said that simply can't be done.
'You can't save the lab school because you can't turn back the clock,' he said.
ACSD1 Trustee Emily Siegel-Stanton said that she had concerns over how SF 126 would affect the district, and primarily, its funding.
'It's with grief in my heart that I provide this testimony, and ask this committee to vote no on this bill today,' Siegel-Stanton said. 'We're living in a new era regarding ... education funding.'
However, former UW Lab School student Adian O'Connor told the committee that the school profoundly impacted her education, upbringing and commitment to Wyoming.
'The lab school provided an environment of compassionate educators, UW student teachers and peers, offering opportunities I wouldn't have had elsewhere,' she said.
O'Connor continued that she has represented the lab school and state, federal and international capacities, from advocating for funding for the local Head Start to traveling Croatia to present at a National Youth Leadership Summit.
'My passion for service was fostered by both my Wyoming upbringing, and by the philosophy of the UW Lab School,' O'Connor said.
Several former teachers also gave impassioned pleas to keep the school open.
Sen. Charles Scott, R-Casper (2025)
Sen. Charles Scott, R-Casper
Sen. Charles Scott, R-Casper, said tough decisions were made regarding the lab school, but that he would vote in favor of SF 126.
'It seems to me that the school has been very successful,' Scott said. 'Schools like that are precious, we need more of them. … It seems to me that what has happened is that both the university and the Albany County School District have found it bureaucratically inconvenient to work together.
'That's what has led to the problem, and the fact that they are destroying a good school doesn't seem to bother them,' Scott said.
It will be difficult to reconstruct and restart the lab school, but Scott said he would vote for the bill.
Rothfuss said that the concept of 'taking $2.5 million from the district is misleading,' because that funding is already being used by the lab school, and will continue if SF 126 is to pass.
'It's not taking, it's not diminishing the capacity of the district,' Rothfuss said. 'The reality is that this shift wouldn't change anything.'
Further, the clearest way to create a loss to the district would be to separate and isolate the two, instead of operating in partnership, Rothfuss said.
Sen. Wendy Schuler, R-Evanston (2025)
Sen. Wendy Schuler, R-Evanston
Sen. Wendy Schuler, R-Evanston, said that she was a student at UW and had good experiences in the lab school. However, because of concerns over decreased enrollment, she said she could not support SF 126.
'I have considered a lot about declining enrollment,' Schuler said. 'I do think that the local school boards need to make decisions on that.'
Sen. Jared Olsen, R-Cheyenne, said that he would not vote for the bill either, because the construct behind the lab school is problematic.
'There are two entities that do not want the school, and this bill tells those two entities, 'You will have the school',' Olsen said. 'Until all the platters are ready to play the game, I don't think it will work.'
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Moving Forward: International Tax After The OBBBA
In this episode of Tax Notes Talk, Alan Cole of the Tax Foundation discusses the international tax provisions in the One Big Beautiful Bill Act and what may be next for negotiations on a global tax framework. Tax Notes Talk is a podcast produced by Tax Notes. This transcript has been edited for clarity. David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: rethinking revenge. When the House released their initial version of the One Big Beautiful Bill Act, the international business community was concerned by the proposed section 899, which came to be known as the revenge tax. We covered this provision in a previous episode, which we'll link to in the show notes. Since then, the bill has been through a number of changes at the behest of senators and one significant change requested by the administration, concluding in the final version signed into law by President Trump. So where did Congress end up on international tax? And what does the bill mean for efforts to reach a consensus on international corporate tax? This episode is part of an ongoing series on the One Big Beautiful Bill Act. As we continue to dive deep into the most important tax changes and provisions in the coming weeks or even months, we'd like to hear from you. If there's an aspect of the bill you'd like to hear more about, please email us at podcast@ But for now, here to talk more about this is Tax Notes senior reporter Jonathan Curry. Jonathan, welcome back to the podcast. Jonathan Curry: Hello again, Dave. David D. Stewart: Now, I understand you recently talked to somebody about this. Who did you talk to? Jonathan Curry: Yeah. I talked to Alan Cole of the Tax Foundation. He's a senior economist there, and he's full of great insights. David D. Stewart: And what things did you talk about? Jonathan Curry: Well, we focused on the international tax provisions of the OBBBA, or the One Big Beautiful Bill Act. We covered quite a lot of ground, to be honest. Of course, this didn't happen in a vacuum. We went through the context, the history that led us to this point. We cover some of the major provisions in the bill, things that a lot of our listeners are, I'm sure, familiar with: the [global intangible low-taxed income, foreign-derived intangible income, and base erosion and antiabuse tax] and now the sad, new nicknames we all have to memorize in order to keep track with this evolving tax landscape that we're in. You'll hear things like the foreign tax credit haircut, the [controlled foreign corporation] look-through rule, things that might not necessarily jump off a page when you're scanning a bill. But it's stuff that's important for a lot of multinational corporations, international tax practitioners in particular, and it's going to have a lot of impact for certain industries. There are going to be some winners, some losers, and things like that. And of course, we talked about one of my favorite topics — which I'm sad it's not going to be in law anymore — the revenge tax, section 899. You'll hear Alan's views on what impact it had on the tax debate and international negotiations. And on the topic [of] international negotiations, all these international tax changes took place in the context of the pillar 2 global minimum tax framework. And you'll hear how he thinks that this moves us in some ways closer to that and some other considerations there. David D. Stewart: All right. Let's go to that interview. Jonathan Curry: Well, Alan, it's great to have you here on the Tax Notes podcast. I know you're excited to talk about your favorite topic in the world: international tax. Welcome. Alan Cole: Thank you. Absolutely great to be here. Jonathan Curry: Yeah. So we're going to dive in and start off by talking from a 30,000-foot view, the big picture here. What was the international tax landscape prior to this new "big beautiful bill" coming into effect? I mean, why were lawmakers even wanting to make changes on the international tax end in the first place? Was this a major reform? Is this [Tax Cuts and Jobs Act] 2.0? What are we looking at here? Alan Cole: Mostly, we're looking at TCJA 2.0 on the international side. This is a very similar coalition to the one that wrote the international tax reform in 2017. Same party, same president. And that means that there's a limited desire to tinker with too much. And on top of that, the coalition had a pretty narrow majority in the House of Representatives, and that also lends itself to not making too many ultra controversial changes. That said, there were reasons to tweak TCJA even from the perspective of a party that had already passed it in recent memory. Jonathan Curry: Yeah. Now, the House version of the bill, when we got the first draft of it, I remember seeing the draft document come out and thinking, "Oh, boy, here's this whole new set of stuff to write about." And I looked at it, and there wasn't very much in there on the international tax space, except for section 899, which we'll get into later. But I mean, can you imagine the world in which international tax just got ignored altogether and the system we have currently in place was just left to continue running? Or was the Senate vision of making some changes here inevitable? Like this was going to have to happen one way or another? Alan Cole: One way you could look at it would be from the House's perspective, it's hard to get unanimous approval for something among the Republican members, and you effectively need unanimous approval in order to get a majority in the House if you're relying only on Republican votes. And that lends itself to just doing what you did before because that's the baseline that everyone can at least start from. But on the other hand, international corporate income tax is not usually an area that draws a lot of political controversy where you'll see a big dispersion in what different members believe. Especially if you're doing things carefully and relatively evenhandedly, and not trying to create big winners and losers. So there was room for a little more reform. I'm not surprised that ultimately the Senate did more to change international corporate income tax provisions than the House did, because the Senate definitely felt like they had room. They had effectively a larger majority than the House majority. But ultimately the House just agreed to the Senate's changes because international corporate income tax is not that politically controversial among members in the sense that there aren't different beliefs among members. So if you're going to present a package and say, "This is the best that our writers could do given the constraints," most of the members are probably going to go, "OK." And that's kind of what happened. The House roughly accepted the Senate's changes, and that's how we ended up with a somewhat more interesting international package than the initial House bill looked like. Jonathan Curry: Well, we've been talking about changes to the international tax portion of our laws here. Let's go over some of those changes. Let's start with the big three: GILTI, FDII, BEAT. Can you just run through us real briefly just a high-level view of what the changes that were made were? Alan Cole: GILTI and FDII both have new names now. Their acronyms are now NCTI [net CFC tested income] and FDDEI [foreign-derived deduction-eligible income]. Those names actually kind of existed before. They were intermediate steps in the calculations that got you to GILTI and FDII. But the reason for the name change is that one of the final steps is no longer there, and that is the subtraction of [qualified business asset investment] from the base of both of those tax bases. And the subtraction there is effectively a subtraction of the return on tangible investments. The idea is if you start with all income and then you subtract the return on tangible investments, what you have left is your intangible income. And that's indeed where the I's in GILTI and FDII come from. Both have an I that stands for intangible, and then the other I stands for income. Now they are each down to one I, just the one that stands for income, and they no longer target intangibles. That change is a "made in America" Trump agenda type change, I think. It's one of the places where you can see a bit of a Trump ideological stamp. And overall, I'm not a fan of this for reasons we can get into, but it's one of the few places where this is really something more than just an update to TCJA. It goes in a new direction, and it takes away the original purpose of GILTI and FDII, which was to target intangible income. Jonathan Curry: And about those acronyms, they used to have these memorable acronyms: GILTI, FDII. We still have BEAT, of course. Have you settled on a way to refer to these new acronyms, the two new acronyms we have here? It's NCFCTI and FDDEI. Any good quick shorthand in your mind that you've settled on? Alan Cole: We're talking about NCTI versus NCFCTI? The C standing for CFC, which stands for controlled foreign corporation. That's the international income component of the new bill. Usually I'm hearing NCTI that can maybe be turned into "necktie" or "nicktee," but I'm not sure which one of those two will win out. And some people have gone with "fidday" for the new FDII, F-D-D-E-I. But it's always been awkward to come up with good names for these things, and certainly the long acronyms are doing themselves no favors. Jonathan Curry: Yeah. It will take a while for the dust to settle and for the tax community to settle on an agreed-upon way to refer to these, I think. Personally, I vote for "necktie." So GILTI and FDII had some pretty substantial changes. BEAT, as I understand, is fairly not that different, correct? Alan Cole: BEAT we can actually go through pretty simply. There was an idea for a whole bunch of changes to BEAT in the Senate draft, but they got rid of that set of changes and went with a much more simple rate hike to BEAT, not as big as the rate hike that it was scheduled for. It was scheduled to go from 10 [percent] to 12.5 [percent], and instead they made it go from 10 [percent] to 10.5 [percent]. So they kind of curved much of the rate increase in BEAT, and they preserved the current-policy treatment of credits and set it in law permanently. So mostly, they punted on BEAT. But there was an effort to do something more interesting, which was a high-tax exemption. And that would have actually done a lot to put BEAT a little bit more towards its intended purpose, or at least its stated purpose. It says it's a base erosion tax. That's what the B-E stands for. And base erosion would be when you're trying to get to a lower-tax jurisdiction, you're taking deductions in the U.S. by making payments out to some lower-tax jurisdiction so that your income shows up there instead. And the U.S. doesn't like that; the U.S. calls that base erosion because they would rather the income be in the U.S. and taxed as U.S. income. And that would make sense if all instances of stuff taxed under BEAT were base erosion. But in many cases, it's effectively just going after normal large countries with high corporate income tax rates because it doesn't actually make any determinations based on what kind of country a company is making payments to, or what kind of presence they have there. It just looks at categories of accounting that are deemed suspicious. So the Senate had an idea: "Well, let's actually look what kind of country it is. And if it's a high-tax country, defined as having at least 90 percent of the U.S. tax rate, then we can exempt you from BEAT, because there, you're not base eroding, you're just paying tax to another country that has a similar tax rate to ours. Presumably because you honestly believe that the royalty payments actually do belong to your enterprises in that other country." And that makes sense if you're a Japanese company and you say that a lot of your work comes from engineers based in Japan. That's a very believable claim, and that's not really a tax evasion-like claim. Same with France, for example. That's not a country that you would try to increase your income tax liability in because it's a high-income tax country. So that idea had a lot of promise, but I think the Joint Committee on Taxation scored it more expensively than perhaps writers thought it would be. I was surprised to see the number that high. I had been conditioned to think that the Joint Committee on Taxation thought that BEAT was a relatively smaller provision. And then we got this larger number, and then sure enough, it was gone in the next draft, and they did something simpler on BEAT. So I think it was just a matter of they didn't get the score they wanted and they pulled back from it. Jonathan Curry: I see. So you don't think it's a policy decision that lawmakers are like, "We don't think we should do this." It's more like, "Well, maybe on the margin, it's just not really worth making the change because it will add to our numbers, our bad math here, the deficit numbers." OK, well, that's interesting. Alan Cole: Yes. I think they were working within a current-policy revenue-neutral framework on the international side. So they were looking at 2025. What are we collecting in 2025? Let's try to design a system that collects about the same amount but is a little bit better. And if the BEAT score stopped them from reaching that goal, then that would be a reason to reverse it. Jonathan Curry: Yeah, yeah, interesting. Now there were a couple other changes in here too — CFC look-through rule, FTC haircut. Anything that surprised you? Or are these all pretty expected provisions to include in this package of proposals? Alan Cole: I think there are two categories here, and actually each of your examples comes from one of the categories. CFC look-through rule, and we could also go with the downward attribution glitch fix. There are some things that are so into the weeds that you can only really get coverage of them in a place like Tax Notes. These are really complex glitches in TCJA, or they are things that have been extended a long time, and it would be complicated if they ever went away. CFC look-through is like that. It would make the handling of U.S. multinationals much more complex without necessarily raising that much revenue. And so they made the CFC look-through rule permanent. That's a patch to the whole CFC look-through issue. And then they also included the patch to fix the problem in constructive ownership rules that was accidentally made in TCJA. It's pretty clear that there was a section of U.S. tax law that was supposed to be amended and instead it got removed, and it creates exceptions to constructive ownership rules. And that exception disappeared entirely rather than being rewritten. And as a result, people were kind of credited with having much greater CFC reach than they actually should have, and it was a whole big mess. So those are the bug fix types. And those, I think, were not big surprises. A lot of them you could see that members like Rob Portman (R-Ohio) and Thom Tillis (R-N.C.) were talking about these things for a while, and they didn't cost much. So those were definitely going to make it in there. And then the other category has to do with kind of the way that the international situation has evolved since TCJA. It's not so much that TCJA was written in a flawed way in 2017 in these cases. It's more that the way the rest of the world does things has changed, although Republicans are not always singing the same tune as the rest of the world on international corporate income tax. Here, there were a few lateral changes that can just harmonize the U.S. with foreign tax cuts a little bit more. And basically, the situation was that the U.S. had what appeared to be lower rates, but actually its rules were less generous in unique ways that were anomalous to the United States. Those are things like expense allocation, the FTC haircut, as you mentioned. Those things make it a little bit worse to be a U.S. company. But in TCJA, you had lower nominal rates than the 15 percent target that the Europeans and OECD want a lot of people to settle on. The Senate took a look at that and said, "Well, we can just remove some of these U.S. idiosyncrasies, and that gives us effectively tax cuts for corporations. And then we can raise the nominal rate, take some of that money back. That's a neutral trade, but it makes our tax code look a little bit more in line with the 15 percent target." But notably, they went only to 14 [percent], not to 15 [percent], as if almost to say, "You're not the boss of us, we will do something slightly different than your target." But effectively, the U.S. at 14 [percent] with its rules is still maybe a little bit worse, a little bit less taxpayer friendly, at least revenue-wise, than a 15 percent rate. So I don't think U.S. companies are getting away with a lot with the 14 [percent] instead of the 15 [percent]. Jonathan Curry: With this new suite of changes that we have, are there any obvious winners and losers here? I mean, you alluded to the Trump administration having a vision and putting its stamp on things. They've talked a lot about increasing domestic investment. Did these changes move the U.S. more towards that? Alan Cole: I think there are some changes that are intended to have a real impact that aren't just a little bit of lateral shuffling and creating a 14 percent rate rather than a lower 13 percent rate. There are some things that are a little bit more intended to be substantive. But even there, from an individual company's perspective, I think a lot of these things come out to be roughly a wash relative to the 2025 tax code. For example, the elimination of QBAI — the attempt to maneuver the system previously directed at intangibles towards a little bit more of a tangible and America First and export-focused tax system — that may not have that much of an impact on an overall taxpayer bottom line because, actually, the sort of company that has a lot of QBAI domestically also has a lot of it internationally. And one of those is a tax cut, and one of those is a tax hike, so they balance out for an individual taxpayer. But overall, you want to be the sort of company that has a lot of capital expenses in the U.S. or research and development in the U.S. and then maybe exports a lot. Whether using your tangibles or intangibles, that probably comes out pretty well. The big thing that I see flagged as a likely downside from large corporate practitioners is a change to [section] 163(j) interest limitations. Effectively, international income doesn't count for that, and that means that those become much tougher on some firms. Jonathan Curry: Yeah. I've certainly heard the same listening to a lot of webinars and hearing from different tax practitioners and what they're saying their eye is on and what's the big thing for their clients to look out for. [Section] 163(j), the foreign element of it definitely comes up quite a lot. So you alluded to this earlier, the current-policy baseline. Republicans did get a little mischievous with their math this time around. They used the current policy as opposed to current law, which broke with a lot of precedent. Can you tell me: How did the math add up here on the international tax provisions? Did we come out roughly revenue neutral in terms of the changes that are the higher rates, but a broader base and so forth? Where did we land in terms of the numbers? Alan Cole: Well, the tax code that was enacted in 2017 under current-law baseline rules, there, in order to make the corporate income tax side of the TCJA permanent, they had to do a fair amount of surprise tax hikes at the very, very end of the budget window. And you can count from 2017 out to 2026. That's when those tax hikes showed up. In a few cases, they had them show up a little bit earlier so as to reduce the score of the TCJA within the budget window, but there was a suite of tax hikes. In the international sphere, a lot of those tax hikes come directly in 2026, but they kind of went for current policy 2025. So what they managed to do as a result of the switch to current policy was effectively cancel out those last minute hikes on the international side and then make permanent the slightly lower, not quite revenue neutral, TCJA international side that wouldn't have passed Byrd rule muster in 2017 without those hikes. They canceled those hikes and made that permanent. So they did get some benefit if you're looking at it from the taxpayers' perspective, or they did create some revenue loss that probably would not have been possible under the current-law baseline. Jonathan Curry: To talk about one of my favorite provisions that's actually no longer in law, section 899, the retaliatory tax, the revenge tax. I certainly had a lot of fun writing about this. It makes for a great headline, and it was such an interesting piece of policy that has kept evolving throughout the process. Section 899 had two elements, correct? There is one that was going to impose these higher, progressively higher withholding rates on corporations, individuals, countries that had what we deem the discriminatory or unfair tax, undertaxed profit rules, UTPRs, and income inclusion rules. And there was also an element that was going to target digital services taxes, which later in the Senate was only going to be happening through the so-called super BEAT that was going to supercharge the base erosion and antiabuse tax. We did get a G7 deal at the end of this where they agreed that they were going to scrap their UTPRs and IRRs. They left aside, shelved for now, the question of DSTs. But in your view, how big of an impact does section 899 have on the international discussion? Do you think that was key to the U.S. getting this agreement with the G7? Or was that just a little sideline, sideshow? Alan Cole: I think [section] 899 was a very dangerous gamble, and I think it paid off. I had concerns about it while it was still in the bill. It didn't make it into the final law, and that was actually the outcome that [section] 899's architects kind of were hoping for, I think. It would have been pretty ugly if it had happened, but it was a threat they didn't want to have to go through on. So yeah, one of the biggest aspects of the OBBB international is effectively the thing that wasn't in the bill. We talked about, I'd say three categories of things that are in the bill. There's the Trump priority type stuff with the QBAI; there's the bug fixes; and there's the moving towards the 15 percent target by doing some lateral trades. But the OBBB also had [section] 899, the retaliatory provision, kind of our doomsday device, our mutually assured destruction thing. And it was supposed to target two foreign taxes, and the G7 agreed to get rid of one. And we said, "OK, good enough." And we put it down. And I think one reason that it worked well was there's broad support for combating UTPR and DST much beyond the Trump administration. One characterization you could make of the Trump administration is it starts a lot of arguments with foreign countries. And in some cases, those arguments are idiosyncratic to the Trump administration specifically. For example, arguing that Canada is not doing enough to combat fentanyl crossing the northern border of the U.S., that was not on most people's radar. That seems like a fight idiosyncratic to the Trump administration. And maybe even fighting over bilateral trade deficits, that's pretty idiosyncratic to the Trump administration. But within the U.S. business community, within the U.S. Congress, there's actually quite a lot of opposition to UTPR and to DST. The former because it usurps Congress's authority. It's a little bit like, "Oh, the Treasury went out and talked to a bunch of people over the Atlantic. Now Congress has to rewrite the U.S. tax code in a bunch of ways. Some of them kind of arbitrary, but don't seem to have much rationale." That wasn't going to fly, if only because it was a usurpation of Congress's authority. And practitioners also didn't like it because it would be a lot more work and it would turn out to not actually have much of an impact on U.S. companies' taxes. DSTs, meanwhile, are basically just tariffs in disguise. They're a way for foreign countries to effectively tariff the large number of U.S. tech companies that have done really well globally. Foreign governments have seen those as big bags of money, like pinatas that they can whack at and the money will fall out and they get a treat. And there's no support in the U.S. for letting these things stand. And so in some cases, when the Trump administration is saying something, there's a little bit of a feeling, "Well, can we wait this out? Might they get distracted?" For example, they don't seem to be talking much about buying Greenland anymore. That was a big thing for a few months, and then they just moved on. And also, there's the reality that there will be a new president and maybe that president is not going to have the same idiosyncratic Trump priorities. But I think [section] 899 being there in legislative text made a lot of people realize that not only is Congress behind the president on DSTs and UTPR, but maybe even most of the rest of the United States is as well. And so there's no way of waiting out the president and maybe making inroads with opposition or with people within his party who don't agree with all of his stuff. No, this was unanimous among Republicans, and I think probably even some Democrats really would actively want these things to go away, and few would make a big priority of arguing for them. So I think [section] 899 showed Congress's stacking order of priorities, and showed the American business community's stacking order of priorities. It even went so far as to say, "These are the specific offenses that we want [section] 899 to apply to. We're going to call out them by name, and we're also going to come up with a list of things that aren't offenses and [section] 899 can't be used for." They narrowly cabin the retaliation to be just these two things. So I think if you're a foreign government and you're not sure what to do with the more hostile or bellicose U.S. trade posture — well, the things that have broad opposition in the U.S., you probably are more likely to make a concession on those than on things that are less workable. And especially with respect to the UTPR, that's something that isn't even in effect yet. So it's easier to not do something that you haven't even started doing yet. It's easier to flake out on a plan that you haven't yet brought to completion than to stop doing things the way you were already doing them for a long time. So all of those reasons, I think, meant that the UTPR was the easiest domino to fall. I don't think that the Trump administration is going to get all of its priorities. For example, the stuff about value added taxes being an unfair barrier to trade. Well, I don't think that Europe is going to reorder its entire tax system. Value added taxes in Europe probably raise something on the order of €4 [trillion] or 5 trillion per year, if you add all of the countries together. Jonathan Curry: Sounds significant. Alan Cole: Yeah, something like that. Jonathan Curry: That's not a small chip in a poker game here. No. Alan Cole: Yeah, yeah. They're not going to just come up with something new within the next three years in order to appease one U.S. president who has idiosyncratically said that VATs are an unfair barrier to trade. Jonathan Curry: Well, Alan, so looking ahead, is there any unfinished business on the international tax front? Or do you think that this round of changes will satisfy lawmakers, policymakers for the next, I don't know, couple of years, three, five years, 10 years before they decide to give things another look? Alan Cole: The biggest unfinished business is in the area of how the U.S. international income tax system will coexist with pillar 2. The G7 deal didn't say that pillar 2 is fully going away, although that's still an outside possibility. More likely, Europe continues to implement its version of CFC rules, its effective equivalent of GILTI or now NCTI. That's all likely to still happen. The U.S. wants to be independent of pillar 2, not have pillar 2 go over and touch things that have previously been touched by the U.S. tax code. In many cases, that's relatively simple. You can think of companies that are American and companies that are German, and obviously at the very top level, you'll have one or the other of the two systems. But it starts to get more complicated when you have nested acquisitions. That's something you see in, for example, the pharmaceutical industry a lot because there are both tax and operations reasons that pharmaceutical companies have long chains of acquisitions. Often there's one type of company that does research, and then another one says, "This is good research. We're going to buy your company and figure out how to distribute the drug everywhere." Once you get those nested things, it's much, much harder to figure out exactly how the income inclusion rule, like the European international rules, would coexist or sit side by side with NCTI without colliding with it. So that's an area of unfinished business. Digital service taxes, also unfinished business. That's effectively kind of the European hidden tariff inside of corporate income tax policy. On our side, BEAT I think is actually unfair in some of the same ways that digital services taxes are. And then the big elephant in the room is all of the other trade policy stuff often done under the economic emergency rationale, which is actually being challenged in U.S. courts, and potentially just normal section 301 retaliatory tariffs too. All of those things create a chaotic international negotiation environment. But overall, the U.S. international tax system would hold up pretty well. My one question is, in the change to make it less targeted at intangible investment, does that end up having an effect on how, say, intangible-heavy firms look at the U.S. tax system? Jonathan Curry: Yeah, that'll be something to watch. All right. Well, Alan, thank you so much for taking time to chat with us today. I appreciate it. Alan Cole: Absolutely. Thank you for having me.
Politico
24 minutes ago
- Politico
Trump and Schumer couldn't clinch a deal. Now a shutdown hangs in the balance.
Despite decades of history between them, their relationship is now almost nonexistent. They haven't had a formal one-on-one meeting since Trump's second inauguration. And they did not speak directly as part of the nominations negotiations, according to two people granted anonymity to discuss private details. The unraveling of a typical pre-summer recess nominations deal has many on Capitol Hill concerned about what is to come. While other congressional leaders are sure to figure into the negotiations, it's Schumer — who will determine whether Senate Democrats filibuster spending legislation — and Trump — who has to sign any shutdown-averting bill — who will be the key players. 'It would be better if those two negotiated,' Sen. Kevin Cramer (R-N.D.) said of Trump and Schumer. Cramer said Senate Majority Leader John Thune served last week as the 'arbitrator' ferrying between the 'bare-knuckled' New Yorkers during the recent nominations fight. And Speaker Mike Johnson will have his hands full trying to keep his thin majority united behind a spending strategy that will keep the pressure on Democrats. Democrats believe the onus is on Thune and Johnson to wrangle Trump — the dominant leader of their party — and convince him to come to the table. They are using their hardball tactics over nominations as a warning shot for the fall funding fight. 'Sooner or later, Donald Trump — Mr. 'Art of the Deal,' or so he claims — is going to have to learn that he has to work with Democrats if he wants to get deals, good deals, that help the American people,' Schumer said late Saturday night as the Senate prepared to leave town for the summer. 'Going at it alone will be a failed strategy.' Trump's decision to temporarily abandon his confirmations push rather than give in to what he called 'political extortion' from Schumer allowed the embattled Democratic leader to do a pre-recess victory lap after taking heat from the party base for months. Schumer came under fierce criticism in March for helping to advance a shutdown-avoiding spending bill written solely by Republicans. He warned at the time that a shutdown would only empower Trump and that the dynamic would be different come September as, he predicted, Trump became more unpopular. Nine other members of his caucus joined him. Trump initially urged Republicans to stay in Washington until all of the roughly 150 pending nominees were confirmed — a demand that could have essentially erased the Senate's planned four-week recess. But Schumer and Democrats demanded that Trump unfreeze congressionally approved spending in return for consenting to the swift approval of some nominees. Trump would not pay the price. In a post where he blasted 'Senator Cryin' Chuck Schumer,' Trump instructed senators to go home. Republicans flirted with adjourning the Senate to let Trump make recess appointments, but that would have required recalling the House — and reviving the Trump-centered drama over the Jeffrey Epstein files. Instead, they are vowing to pursue a rules change later this year to quickly push Trump's nominees through the Senate. Schumer relished the Truth Social post, putting a poster-sized version on display next to him as he spoke to reporters Saturday night and comparing it to a 'fit of rage.' He kept the heat on Monday, joining with House Minority Leader Hakeem Jeffries to demand a so-called four corners meeting with Thune and Johnson to discuss a government funding strategy lest a government shutdown hit Oct. 1. (Republicans, who accuse Schumer of 'breaking' the funding process, haven't responded.) Though Schumer and Thune have had informal talks about September, they haven't delved beyond the broad strokes. The South Dakota Republican, asked about Trump and Schumer, predicted the two will have an 'evolving relationship.' 'At some point, obviously, there are certain things they are just going to have to figure out, because on some of these things where we need 60 [votes], there are going to have to be conversations,' Thune said in a brief interview. Schumer and Thune joined 85 other senators to advance the chamber's first bipartisan funding package late last week, in a show of unity that senators hope will pave the way for another package of spending bills in September. But Congress is still expected to need a short-term funding patch by Oct. 1, and there are early signs of splinters among Republicans about what that step should look like. But the nomination fight also underscores that Trump is the ultimate wild card heading into the showdown. At various points heading into and over the weekend, Republicans and Democrats appeared to believe they were close to an agreement and just needed Trump's blessing, only for it to unravel. Sen. Richard Blumenthal (D-Conn.) said that Schumer's 'satisfaction' in the wake of the nominations showdown is justified but added it was impossible to predict if Trump would come to the table in September. 'One of the most striking and salient facts about Donald Trump is his unpredictability,' he said. Schumer and Senate Democrats have been trying to game out multiple scenarios in closed-door caucus meetings. They have also been discussing what demands to make in exchange for their votes to fund the government. Those could range from an ironclad commitment from Republicans that they won't agree to claw back more funding or seek policy concessions, such as unfreezing foreign aid or National Institutes of Health funds, or pursuing a deal on soon-to-expire Affordable Care Act tax credits. Democrats have their own internal fault lines to manage. Already Pennsylvania Sen. John Fetterman is vowing to vote to keep the government open, while others like Sen. Elizabeth Warren of Massachusetts are striking a more combative tone. Republicans' unwillingness to commit to rejecting future spending clawbacks, she said, shows 'the budget negotiations weren't worth the paper they were written on.' But Schumer, for now, is savoring the moment. After he wrapped up his news conference Saturday night, the smiling Democratic leader insisted his party was 'more effective and more unified than the Republicans' as he kibitzed with reporters. 'What do you think — the art of the deal?' he asked, his arm around a poster-board display of Trump's 'Cryin' Chuck' post.
Yahoo
37 minutes ago
- Yahoo
Ohio Senate race among those to watch in 2026 election
President Donald Trump's agenda in the second half of his second term will hinge on whether Republicans can maintain control of Congress in next year's midterm elections. Ohio's Senate race could be a player in deciding which party controls the chamber. In the Senate, where the GOP has a slim 53-47 majority, being the party in charge is vital for the president and his ability to pass key legislation priorities and confirm nominees, including any potential Supreme Court vacancies. Get The Scoop: Sign up for our weekly Ohio politics newsletter Heading into 2026, congressional Republicans look to keep their legislative advantage but face the challenge of precedent. Often, the party that does not hold the White House fares better in midterm congressional elections. The Buckeye State represents one of Democrats' few pickup opportunities, and even then it will not be an easy flip. Republican Sen. Jon Husted was picked by Ohio's governor to fill the seat vacated by Vice President JD Vance at the start of the year, and Husted will be on the ballot next November to keep his spot. Husted has a long history in Ohio politics having served as lieutenant governor, secretary of state, speaker of the House and a state senator. Ohio has become reliably Republican in recent years, making the fight to flip it tough for Democrats. Democrats' best shot probably is former Democratic Sen. Sherrod Brown, who lost his bid for reelection last year to Sen. Bernie Moreno. In 2024, Moreno defeated Brown by less that four percentage points in the same election where Trump defeated Kamala Harris by more than 11 in Ohio. However, Trump is not on the ballot himself next year. During the midterm election in Trump's first term in 2018, Brown won reelection despite a Republican sweep of nonjudicial statewide races. Brown was first elected to the Senate in 2006 and also reelected in 2012. Brown previously served as a congressman, Ohio secretary of state and as a state lawmaker. The race between Brown and Moreno set a record as the most expensive non-presidential election in U.S. history with both sides spending more than $470 million total. In March, Brown announced he was forming a nonprofit that aims to highlight the plight of workers and push Republicans and Democrats to enact policies that benefit them. Axios reported that Brown met with Minority Leader Chuck Schumer in late July as part of the top Senate Democrat's efforts to lobby Brown to run again. Brown has also been named as a possible candidate for Ohio governor. Gov. Mike DeWine cannot run again due to term limits. Here are the other Senate races to watch across the country heading into the 2026 midterm elections. Open race in North Carolina set to be one of the most competitive North Carolina's two-term senior senator, Republican Thom Tillis, announced in June that he would not be seeking reelection. Already a top target for the Democrats, the North Carolina race was set to be one of the most competitive Senate battles in 2026, even with Tillis on the ballot. Now, the open seat has attracted high-profile contenders on both sides of the aisle. Former North Carolina Gov. Roy Cooper, a Democrat, announced his campaign formally on July 28 after weeks of speculation. On the Republican side, Lara Trump, the president's daughter-in-law and former co-chair of the Republican National Committee, said she considered jumping in. But after she announced July 24 that she would not run for the seat, President Trump gave his backing to Republican National Committee chair and former North Carolina GOP Chair Michael Whatley. Retirement makes Michigan Senate race a toss-up In Michigan, another retiring incumbent has set the stage for a toss-up race next year. Sen. Gary Peters, a Democrat, announced in January that he would not seek a third term. Republican Mike Rogers, a former congressman with Trump's endorsement, is his party's expected nominee. Rogers ran in 2024 and lost narrowly to Democratic Sen. Elissa Slotkin. Among Democrats, Rep. Haley Stevens and state Sen. Mallory McMorrow lead the pack of 2026 candidates. Republicans target Sen. Jon Ossoff in Georgia Georgia's Democratic Sen. Jon Ossoff must fend off a pack of conservative lawmakers to hang on to his seat in 2026. Alongside fellow Georgia Democrat Sen. Raphael Warnock, Ossoff won a runnoff election in January 2021 that secured him a first term in Congress and his party a chamber majority. Republicans looking to unseat him include Rep. Buddy Carter, a former pharmacist who represents the Savannah area. Carter was first to throw his red hat in the ring. But others, including Rep. Mike Collins, have since joined the contest. Carter and Collins are coveting Trump's support, an endorsement that could carry weight with Georgia's deep-red electorate pockets. GOP Senate primary race in Texas could shake things up Texas Republican Sen. John Cornyn stands a good chance of winning a fifth term against a Democratic challenger next November in the red-leaning Lone Star State. But first, he must make it through what is promising to be a tough primary against the state's attorney general, Ken Paxton. Cornyn has served in the Senate since 2002, but early polls showed him down double digits to Paxton. More: Texas AG Ken Paxton's wife files for divorce 'on biblical grounds' National Republicans have expressed concern that Paxton, who has faced indictments, impeachment and, more recently, a very public divorce, could cost the GOP their safely held Texas seat in a general election. Democrat and former Rep. Colin Allred, who ran unsuccessfully against Sen. Ted Cruz in 2024, has announced his campaign for 2026. Texas state Rep. James Talarico has said he is 'seriously considering' a run as well. Sen. Lindsey Graham facing GOP primary in South Carolina Sen. Lindsey Graham, a Republican from South Carolina, has also drawn a GOP challenger in his 2026 bid for reelection. Paul Dans, the original author of Project 2025, a sweeping conservative agenda to overhaul the federal government, announced his candidacy at an event in Charleston July 30. The primary contest will likely pit MAGA voters in the Palmetto State against one another. Though Graham has been a regular target of criticism from Trump − displeased by the lawmaker at times breaking from the GOP leader − he is now an ally to the president and has already received Trump's 'complete and total endorsement.' Dans' primary challenge will be an uphill battle. Should Graham come out on top, he is heavily favored to win a fifth term. A pack of Democrats are vying to face Graham or Dans in the general, though South Carolina is generally considered a safely red seat. Democrats see chance to pick up Maine Senate seat Sen. Susan Collins, R-Maine, is about to wrap her fifth term in the Senate, and while she has yet to formally announce her bid for reelection, many colleagues expect her to run again. Her position as one of the upper chamber's most independent voices has kept her in favor, and in office, with her left-leaning state, though Democrats still see this upcoming race as one of their top pickup opportunities if two-term Gov. Janet Mills decides to run. Collins has garnered a reputation for being one of the few congressional Republicans willing to tell Trump no. She voted against two of his major legislative priorities this summer – a sweeping tax and spending bill, as well as a $9 billion cut to public broadcasting and foreign aid funding – and has openly criticized some of the president's nominees. Willingness to oppose Trump typically comes with the president's full public ire – and often a MAGA-aligned primary opponent. But Collins is the only Republican senator to have won a state in which Democrats won the popular vote in 2024. Her unique position seems to, at least for now, have kept Trump from speaking out against who many view as the GOP's best chance to keep their seat in Maine. Several Democratic candidates have announced campaigns against Collins, including David Costello, who ran unsuccessfully against Maine's Independent Sen. Angus King in 2024. All eyes are most focused on Mills, the state governor who has also tussled with Trump but hasn't yet said whether she will run. Minnesota senator retiring, but state likely to stay with Democrats Minnesota's Democratic Sen. Tina Smith announced earlier this year that she plans to retire at the end of her term, calling the decision "entirely personal." With the state's blue tilt, Smith's seat has a good chance of staying in Democrats' hands. Minnesota Lt. Gov. Peggy Flanagan and Rep. Annie Craig are among the front-runners for their party's nomination. Minnesota Gov. Tim Walz, 2024 Democratic presidential nominee Kamala Harris' running mate, opted back in February not to run for the Senate. On the Republican side, former NBA player Royce White is running again after losing his bid against Sen. Amy Klobuchar in 2024. Former Navy SEAL Adam Schwarze has also announced his campaign for the GOP nomination. New Hampshire senator retiring creating open race Democratic Sen. Jeanne Shaheen of New Hampshire announced she would not be seeking another term in 2026 either. Democratic Rep. Chris Pappas, who launched his campaign in April, is widely seen as a strong contender to succeed Shaheen. Republican Scott Brown, a former Massachusetts senator and former ambassador to New Zealand and Samoa in Trump's first term, is among a handful of candidates competing on the GOP side. Like Minnesota, Cook Political Report has rated New Hampshire's race leaning Democrat. Iowa Senate seat likely to stay with GOP In Iowa, Sen. Joni Ernst, a Republican, has the advantage, with Cook Political Report rating her race likely Republican. Three Democrats so far have launched bids in hopes of beating those odds: Nathan Sage, the former chamber of commerce director from Knoxville; state Rep. J.D. Scholten; and state Sen. Zach Wahls. Nebraska Senate race could be surprisingly competitive Nebraska is widely seen as a Republican stronghold with incumbent GOP Sen. Pete Ricketts, though there could be a surprisingly competitive race in 2026 with Independent candidate Dan Osborn jumping back into a statewide election. Osborn came within 7 percentage points of beating Sen. Deb Fischer in 2024, a closer-than-expected margin in the GOP-dominated state. Osborn, a former labor leader, is a registered Independent but received campaign contributions from Democrats in his last campaign (money he told NBC he did not ask for). Ricketts, a former Nebraska governor and part owner with his family of the Chicago Cubs, is running for a full term after being appointed to the job in January 2023 upon the resignation of Republican Sen. Ben Sasse. USA TODAY Network Ohio Bureau Chief Anthony Shoemaker contributed to this report. This article originally appeared on USA TODAY: Will Ohio matter in 2026 race to control the US Senate?
