Ron Estes on Sound Tax Policy for Global Business Success

International Tax Negotiations and Pillar 2

• 🇺🇸 Rep. Ron Estes expresses concern over the slow pace of OECD Pillar 2 negotiations, with only 28 days left in the year.
• ⚠️ He highlights that the treatment of substance-based tax incentives is a major stumbling block.
• ⚖️ Estes emphasizes the need for non-refundable US tax credits to be treated equitably with other countries' refundable tax credits to avoid harming inbound investment and the US tax base.
• 🛡️ Without a swift resolution, the US may need to implement protectionary measures to safeguard its tax base.

Impact of Reconciliation Bill on Pro-Growth Policies

• 📈 The reconciliation bill is noted for enhancing America First pro-growth international policies enacted since the 2017 TCJA.
• 💡 Beneficial tweaks were made to BEAT (Base Erosion and Anti-Abuse Tax) and FDII (Foreign-Derived Intangible Income), including locking in rates and simplifying calculations.
• 🧠 Further work is suggested, such as considering the high tax exemption for BEAT and allowing deductions for payments already subject to US tax to encourage bringing intellectual property back to the US.
• ✈️ Eliminating the foreign tax credit haircut for NCTI (formerly GILTI) could simplify tax rules and incentivize companies to build intellectual property in the US.

Enhancing US Investment and Competitiveness

• 🏗️ Allowing taxpayers to deduct the cost of constructed assets as they are incurred, rather than waiting until completion, could enhance future investments in the US.
• 💰 The Working Families Tax Cuts aimed to restore immediate R&D expensing and full expensing for domestic investments.
• 🚀 Additional pro-growth reforms, like strengthening the location of IP in the US and simplifying tax credits, are needed to position the US for the future.
• 🤝 Treasury regulations are crucial for providing stability and certainty to businesses regarding recent tax changes.
• 🌐 Continued collaboration with Treasury is important to ensure the US remains the best place globally for investment and business.