Latest news with #TreasuryDepartment
Yahoo
17 hours ago
- Business
- Yahoo
The ‘revenge tax' is dead before it even started
The Treasury Department and Congress on Thursday moved to kill a so-called revenge tax that was set to raise taxes on foreign investment and had spooked Wall Street and global business leaders. Treasury Secretary Scott Bessent on Thursday announced a deal with G7 partners that will exclude US companies from some global taxes in exchange for the US dropping Section 899 from Republican's 'One Big Beautiful Bill Act.' Bessent said in a post on X that he would ask Congress to remove Section 899 from the budget bill. Senator Mike Crapo and Rep. Jason Smith, who co-chair the joint committee on taxation, said in a statement Thursday that following Bessent's request, they would remove Section 899 from the bill. Section 899 was a tax code tucked in to President Donald Trump's budget bill that would have raised taxes on the income earned from US assets held by individuals or businesses in other countries with taxes the US perceived as unfair for American businesses. The provision would 'facilitate penalty taxes on foreign companies operating in the US if their home country is deemed to have a 'discriminatory' tax system,' analysts at Citi said in a note. The tax code was considered a 'revenge' tax because it was designed to retaliate against a global tax framework agreed upon in 2021 by the Biden administration and the Organization for Economic Cooperation and Development, according to Mark Luscombe, principal federal tax analyst at Wolters Kluwer. Former Treasury Secretary Janet Yellen had negotiated a tax agreement with other OECD countries that included setting a global minimum tax rate of 15%. Republicans had opposed the agreement and thought it was unfair, arguing it ceded authority on taxation, Luscombe said. The 'revenge tax' also was set to retaliate against digital services taxes, or taxes on US tech companies that provide services to users in other countries. Digital services taxes were perceived as 'discriminatory' by the Trump administration, said James Knightley, chief international economist at ING. Trump had previously signed an executive order on his first day in office announcing that tax deals agreed upon between the Biden administration and the OECD were null. Bessent's announcement leaves room for how the United States and other countries might negotiate on taxes. 'The Trump Administration remains vigilant against all discriminatory and extraterritorial foreign taxes applied against Americans,' Bessent said in his post on X. 'We will defend our tax sovereignty and resist efforts to create an unlevel playing field for our citizens and companies.' The so-called revenge tax, which had stirred debates on Wall Street and law firms across the Atlantic, is moot before it even went into effect. There had been back-and-forth debates in recent weeks about the implications of Section 899 and whether it would push global investors away from the United States. The provision had sent shivers up Wall Street's spine as it appeared to be another protectionist policy that would penalize global investors who put their money in the United States. 'Great concern had been expressed by Wall Street and affected stakeholders about the enactment of Section 899 and its impact on foreign investment in the United States, particularly in view of its complexity, potential scope of application and compliance obligations,' attorneys at law firm Holland & Knight said in a note. 'Those concerns have been alleviated for now.' International business groups were in Wasington in recent weeks negotiating with lawmakers. Jonathan Samford, CEO of the Global Business Alliance, which opposed Section 899, told CNN the provision would have 'squandered opportunity and more investment' and contributed to 'further isolation.' 'We're very pleased that President Trump and the administration have pursued this negotiation, and as a result, called for withdrawal of this punitive and discriminatory provision,' he said. 'I commend Chairman Smith and Chairman Crapo for focusing on making the United States the most competitive it can be.' Republicans this week had begun hinting that Section 899 might be negotiable. Director of the National Economic Council Kevin Hassett said in an interview with Fox Business on Wednesday that Section 899 might not be included in the final budget bill. 'You can try to retaliate, but it's probably better to work out an agreement than just have a tax fight, just like we're having tariff fights,' Luscombe said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
19 hours ago
- Business
- CNN
The ‘revenge tax' is dead before it even started
The Treasury Department and Congress on Thursday moved to kill a so-called revenge tax that was set to raise taxes on foreign investment and had spooked Wall Street and global business leaders. Treasury Secretary Scott Bessent on Thursday announced a deal with G7 partners that will exclude US companies from some global taxes in exchange for the US dropping Section 899 from Republican's 'One Big Beautiful Bill Act.' Bessent said in a post on X that he would ask Congress to remove Section 899 from the budget bill. Senator Mike Crapo and Rep. Jason Smith, who co-chair the joint committee on taxation, said in a statement Thursday that following Bessent's request, they would remove Section 899 from the bill. Section 899 was a tax code tucked in to President Donald Trump's budget bill that would have raised taxes on the income earned from US assets held by individuals or businesses in other countries with taxes the US perceived as unfair for American businesses. The provision would 'facilitate penalty taxes on foreign companies operating in the US if their home country is deemed to have a 'discriminatory' tax system,' analysts at Citi said in a note. The tax code was considered a 'revenge' tax because it was designed to retaliate against a global tax framework agreed upon in 2021 by the Biden administration and the Organization for Economic Cooperation and Development, according to Mark Luscombe, principal federal tax analyst at Wolters Kluwer. Former Treasury Secretary Janet Yellen had negotiated a tax agreement with other OECD countries that included setting a global minimum tax rate of 15%. Republicans had opposed the agreement and thought it was unfair, arguing it ceded authority on taxation, Luscombe said. The 'revenge tax' also was set to retaliate against digital services taxes, or taxes on US tech companies that provide services to users in other countries. Digital services taxes were perceived as 'discriminatory' by the Trump administration, said James Knightley, chief international economist at ING. Trump had previously signed an executive order on his first day in office announcing that tax deals agreed upon between the Biden administration and the OECD were null. Bessent's announcement leaves room for how the United States and other countries might negotiate on taxes. 'The Trump Administration remains vigilant against all discriminatory and extraterritorial foreign taxes applied against Americans,' Bessent said in his post on X. 'We will defend our tax sovereignty and resist efforts to create an unlevel playing field for our citizens and companies.' The so-called revenge tax, which had stirred debates on Wall Street and law firms across the Atlantic, is moot before it even went into effect. There had been back-and-forth debates in recent weeks about the implications of Section 899 and whether it would push global investors away from the United States. The provision had sent shivers up Wall Street's spine as it appeared to be another protectionist policy that would penalize global investors who put their money in the United States. 'Great concern had been expressed by Wall Street and affected stakeholders about the enactment of Section 899 and its impact on foreign investment in the United States, particularly in view of its complexity, potential scope of application and compliance obligations,' attorneys at law firm Holland & Knight said in a note. 'Those concerns have been alleviated for now.' International business groups were in Wasington in recent weeks negotiating with lawmakers. Jonathan Samford, CEO of the Global Business Alliance, which opposed Section 899, told CNN the provision would have 'squandered opportunity and more investment' and contributed to 'further isolation.' 'We're very pleased that President Trump and the administration have pursued this negotiation, and as a result, called for withdrawal of this punitive and discriminatory provision,' he said. 'I commend Chairman Smith and Chairman Crapo for focusing on making the United States the most competitive it can be.' Republicans this week had begun hinting that Section 899 might be negotiable. Director of the National Economic Council Kevin Hassett said in an interview with Fox Business on Wednesday that Section 899 might not be included in the final budget bill. 'You can try to retaliate, but it's probably better to work out an agreement than just have a tax fight, just like we're having tariff fights,' Luscombe said.
Hindustan Times
20 hours ago
- Business
- Hindustan Times
Trump says July 9 trade deal date is not fixed date
President Donald Trump said that his self-imposed July 4 goal to pass his tax bill isn't an absolute deadline, remarks that give Republican negotiators additional breathing room as lawmakers remain at loggerheads over several issues in the massive economic package. US President Donald Trump arrives to speak in the East Room of the White House in Washington, DC, US, on Thursday, June 26, 2025.(Bloomberg) {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} 'It's important, it's not the end-all,' Trump told reporters on Friday about the Independence Day deadline. 'It can go longer, but we'd like to get it done by that time if possible.' {{^usCountry}} {{/usCountry}} {{^usCountry}} {{/usCountry}} House Speaker Mike Johnson suggested earlier Friday that the July 4 date may slip, even as he and Treasury Secretary Scott Bessent said they believed they could soon unlock a compromise over one of the key sticking points in the bill: the state and local tax deduction. Trump is planning to stay in Washington over the weekend to exert pressure on lawmakers to reach a deal on the bill, according to a White House official. Republicans remain divided over several thorny issues holding up the bill, including size of the SALT deduction, cuts to Medicaid health benefits and the price-tag of the legislation. {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} {{^usCountry}} Bessent said that he met with a group of what he called the 'SALT Republicans' at the Treasury Department Thursday, where he said they made progress even as New York Republican Nick LaLota proclaimed he's a 'hard no' on a proposal being floated to raise the cap for only five years. {{/usCountry}} {{#usCountry}} Bessent said that he met with a group of what he called the 'SALT Republicans' at the Treasury Department Thursday, where he said they made progress even as New York Republican Nick LaLota proclaimed he's a 'hard no' on a proposal being floated to raise the cap for only five years. {{/usCountry}} {{^usCountry}} 'My sense is we're very close to a deal. It's going to help the voters in their district, but it is going to be fair for the overall American people,' Bessent told Fox Business on Friday. 'It's time for everyone to put away individual interests.' {{/usCountry}} {{#usCountry}} 'My sense is we're very close to a deal. It's going to help the voters in their district, but it is going to be fair for the overall American people,' Bessent told Fox Business on Friday. 'It's time for everyone to put away individual interests.' {{/usCountry}} {{^usCountry}} Those so-called SALT Republicans are pushing to preserve a deal included in the House bill that increased the deduction cap to $40,000, up from the $10,000 in current law. The Senate draft keeps the write-off at $10,000. {{/usCountry}} {{#usCountry}} Those so-called SALT Republicans are pushing to preserve a deal included in the House bill that increased the deduction cap to $40,000, up from the $10,000 in current law. The Senate draft keeps the write-off at $10,000. {{/usCountry}} {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} Some House lawmakers from New York, New Jersey and California have threatened to block the bill without an adequate SALT compromise. Talks between Bessent, House members and Senate leaders in recent days have coalesced around including a $40,000 cap in the legislation, but senators have pushed to water down other elements included in the House SALT plan, including a lower income limit to claim the credit and a slower annual increases to the write-off. The talks have been fraught, with LaLota calling an offer Bessent presented before the Treasury meeting on Thursday as 'insulting' and 'disgusting.' LaLota said then he would not go to the Treasury meeting but others attended. On Friday, LaLota said he'd heard talk of a proposal that would set the SALT cap at $40,000 for five years and then revert to $10,000 after that. {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} 'I can't be a yes on that. That just affirms the very thing I've been against for so long,' he said. New York Divisions Fellow New York Republican Mike Lawler, however, called the ongoing talks 'productive' but declined to disclose details. When asked if SALT Republicans are splintering, Lawler said, 'I'll let others speak for themselves.' Johnson told reporters Friday that he believes the long-running negotiations over the SALT deduction will be 'resolved in a manner that everybody can live with.' 'No one will be delighted about it, but that's kind of the way this works around here,' Johnson said, projecting that he believes other sticking points on the bill can be resolved Friday. Senator Markwayne Mullin, a key negotiator, added that they have spent hours negotiating alongside the White House on SALT, reiterating that neither side will feel 'great' about it, but that he hopes there will be more reasons to vote for it than against it. {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} 'The fact is: we need the SALT guys,' Mullin said on Fox News. 'It's expensive, though. It's a really, really expensive price tag.' Ongoing Talks House Budget Committee Chairman Jodey Arrington told Fox Business SALT is just one of several issues — including resolving differences over cuts to Medicaid and nutrition benefits — that still has to be addressed. He said that a key issue for many House members is the overall price tag of the bill, which may prove to be a challenge if the Senate produces a more costly version than the House proposal. Dozens of House conservatives in coordination with four Senate conservatives are raising objections to the cost of the House bill. They want to see deeper cuts to the safety net and are angered that some cuts have been tossed out of the bill by the Senate parliamentarian. {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} {{^userSubscribed}} {{^usCountry}} {{/usCountry}} {{#usCountry}} {{/usCountry}} {{/userSubscribed}} 'The Senate has to work through some issues. I'm not as concerned about SALT and about the healthcare and welfare reforms,' Arrington said. 'I'm mostly concerned about the cost.' Trump has said he wants Congress to send him the final bill to sign by July 4, a deadline that is looking increasingly elusive as lawmakers grind through the talks. The Senate is planning to stay in Washington through the weekend and could begin the voting process in the coming days. SHARE THIS ARTICLE ON
Bloomberg
a day ago
- Business
- Bloomberg
Stocks Advance Amid Trade Talks; Nike Jumps on Positive Outlook
Stocks climb as the US and China confirm a trade framework has been signed. The Treasury Department announces a deal with G-7 allies to remove the Section 899 "revenge tax" proposal from President Trump's tax bill. Nike extends gains after its quarterly revenue beat estimates. The sportswear company predicts its yearlong sales decline to ease. Viktor Hjort of BNP Paribas and Keith Lerner of Truist discuss the strength in the equity market. 'Bloomberg Brief' delivers the market news, data and analysis you need to set your agenda. (Source: Bloomberg)
Bloomberg
a day ago
- Business
- Bloomberg
Bloomberg Daybreak: China Confirms Trade Framework
1) China said it has further confirmed details of a trade framework with Washington, echoing US Commerce Secretary Howard Lutnick's earlier comments about a US-China agreement that stabilized ties. 2) Stocks gained as the US moved closer to trade deals with China and other major trading partners, while expectations are rising for Federal Reserve interest-rate cuts this year. 3) The Treasury Department announced a deal with G-7 allies that will exclude US companies from some taxes imposed by other countries in exchange for removing the Section 899 'revenge tax' proposal from President Donald Trump's tax bill.
