[Congressional Record Volume 169, Number 81 (Monday, May 15, 2023)]
[Senate]
[Pages S1639-S1640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                           Global Minimum Tax

  Madam President, over the past few weeks, I have had many 
conversations with Tennessee business owners about their concerns with 
the Pillar Two tax regime. These proposed rules started to take shape 
under the Trump administration and were intended to streamline the 
international tax system. Well, that has all run off the rails after 
the Biden administration started to get involved in these negotiations, 
and the progress that had been made suffered the same fate as many 
policies that have helped America rebound from the recession that took 
place in 2009.

  Once again, the Biden administration has rubberstamped a deal that 
will paint a target on the backs of American companies and allow other 
countries to subsidize their own economies with American tax dollars. 
Indeed, when you look at this, Pillar Two will force multinational 
companies making more than $800 million in revenue to pay at least a 
15-percent effective tax rate on income earned in every country where 
they operate, including their home base.
  If a company isn't paying at least 15 percent at home, other 
countries would be allowed to impose an additional tax on their 
domestic income using the undertaxed profits rule. It is referred to as 
UTPR.
  I want you to think about this. What the Biden administration has 
signed up for is going to be other countries that say: Oh, you are not 
paying enough tax, American business; so you are going to have to pay 
tax over here and over here and over here.
  It becomes a money grab on U.S. businesses.
  Now, this undertaxed profits rule--doesn't that just sound odd? Your 
profits are undertaxed--undertaxed.
  This was designed so they can enforce what is called the global 
minimum tax. And I am sure that, in the coming months, we will hear 
more about this scheme and what it is actually going to do. But 
Tennesseans living and working in the real world have highlighted with 
me a couple of different problems that they see.
  First, this plan undermines multiple congressionally approved 
bipartisan tax treaties that were negotiated to help American companies 
be more competitive. If we allow this deal to go forward, we will hurt 
businesses and severely limit our own ability to respond to a recession 
or bolster our supply chains. So what they are doing--what the Biden 
administration is doing--is saying: All right, all of you companies and 
all of these other countries out here, come on, this is your chance to 
tell U.S. companies how you think they ought to run their business, and 
they are going to have to pay you.
  Does that sound like something that is a pro-America economics 
policy? Of course, not. Why would anybody at the Department of Commerce 
or anyone in this administration want to make life harder and more 
unfair for U.S. companies that are fighting supply chain issues, that 
are struggling every day to keep people employed and to raise their 
wages?
  You know, it is kind of like betting against yourself. But oh, no, 
they do it. That is their plan.
  The second problem is even more egregious. By design, these new rules 
will force the United States into a ``one size fits all'' tax regime we 
have repeatedly rejected, and it will make American companies the 
primary target of yet another punishing mandate.

[[Page S1640]]

  This country leads the world in job creation and growth, specifically 
because we embrace tax incentives and other pro-business policies. But 
Pillar Two will penalize businesses for taking advantage of pro-growth 
incentives, and no one will fare worse than the United States.
  Here is the chart to make it easy for everyone to understand, and I 
invite my colleagues to take a good look at this. This is what the 
global minimum tax scheme will do to U.S. companies. This is what 
Pillar Two and the undertaxed profits rule will do to employers in your 
State--in everyone's State. This is what is going to happen. Take a 
look at this.
  Global minimum tax, 39.6 percent of that is coming from companies 
that are here. They are in every one of our States--every single one--
and 39.6 percent of this is coming from U.S. companies.
  Is that fair? Is that equal?
  Well, let's look at the numbers from the IMF. Let's look at what they 
are saying about that.
  Now, when you look at global GDP, the U.S. portion of that is 24 
percent, which means that this rule would impose a massively 
disproportionate tax burden on American companies. Remember, we are at 
39.6 percent for American companies.
  Well, the China slice is this little gray slice down here. It 
contributes 17.9 percent of the GDP, but they are only going to account 
for 7.6 percent of the income targeted by the UTPR. France, Germany, 
and other companies would account for much less compared to their share 
of the GDP.
  This rule punishes growth and success, which is bad for investment. 
It is bad for people that depend on these companies. It is bad for our 
citizens and their paychecks, and it is a way to redistribute the 
wealth of the United States to other countries by constructing this.
  I think this is a really bad deal.
  Now, it also benefits our adversaries. The Chinese Communist Party is 
jumping for joy over these things because Beijing added some language 
to Pillar Two that exempts ``state-owned'' companies. The OECD 
guidelines define this, in the simplest terms, as an enterprise under 
some manner of state control--under some manner of state control--that 
offers goods or services for profit in the same manner a private 
operator would.
  Well, under this definition, what enterprise in China isn't state 
owned?
  If this seems like a win for communism, it is because it is. Under 
the proposed rule, the CCP, which has a stake in all of these companies 
in China--that is how you do business--they would be able to subsidize 
their own economy with foreign tax dollars while avoiding the 
additional tax burden.
  Of course, we know what the CCP is doing with the profits that they 
are making. They are building up their military. They are bullying 
Taiwan, the Philippines, the island nations, and putting 7 percent of 
their GDP in building up their military because they want to dominate 
us.
  Well, business owners in Tennessee have been keeping an eye on these 
rules, and I haven't found anybody that thinks this thing is a good 
idea.
  Redtape alone will dissuade businesses from investing here because 
the cost of compliance will not be worth the potential profit. This, of 
course, presents a problem because, right now, Tennessee is benefiting 
tremendously from direct foreign investment.
  Here is a great example. SK Innovation's partnership with Ford Motor 
Company at the Blue Oval City plant in Haywood County is bringing 
thousands of jobs and millions of dollars of investment to West 
Tennessee. Blue Oval is already mired in redtape and in supply chain 
issues, courtesy of this administration.
  If we allow Pillar Two to take hold and penalize this massive 
investment, Ford and SK Innovation and Tennessee workers will suffer, 
and so will the hundreds of suppliers, the small businesses, the 
skilled workers who are depending on these jobs to help a lot of these 
small businesses grow. We will see the price spread to the 
municipalities that are tackling the issues of expanding utilities, 
roads, and infrastructure. Local housing developers will take a hit. 
Many of these small businesses and businesses that were really planning 
to flourish will fail.
  I find it disturbing that this administration will waste time 
spreading false claims about their legendary job creation skills while 
they write rules that are undermining the ability to do business.
  I know that my colleagues on each side of the aisle are flabbergasted 
by this, because we all said as much during last week's Finance 
Committee hearing.
  This country is on the verge of another economic disaster because 
this administration refuses to stand up for American companies--
homegrown companies. Many of them started small, and they have grown.
  Instead of fighting for counties like Haywood County, TN, the White 
House is serving up Haywood County's taxpayers on a silver platter. 
Why? To redistribute the wealth. Look at who is going to pay. Instead 
of fostering a competitive playing field, they are punishing businesses 
because they are successful--redistribute the wealth.
  Look at this pie chart. Take it in. All this has done is shown the 
American people that they are not the Biden administration's priority. 
It is clear.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Indiana.
  Mr. YOUNG. Madam President, I ask unanimous consent to speak for up 
to 8 minutes prior to the rollcall vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.