Treasury Secretary Scott Bessent asked Republicans in Congress on Thursday to remove the so-called “revenge tax” from President Trump’s “big, beautiful” bill.
The provision would grant Trump the authority to tax foreign holdings of US investments as a way to retaliate against countries imposing new taxes on US companies operating overseas.
Bessent argued that the provision, known as Section 899, was no longer necessary after the Trump administration reached a deal with G7 nations at last week’s summit to exempt US companies from a 15% global corporate minimum tax championed by the Biden administration.
“After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests,” the Treasury secretary wrote on X. “President Trump paved the way for this historic achievement.”
“OECD Pillar 2 taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months,” Bessent added. “I want to thank my G7 counterparts for their partnership and collaboration towards achieving this historic outcome.”
“Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill.”
The massive piece of legislation is currently working its way through the Senate.
Sen. Mike Crapo (R-Idaho), the top Republican on the Senate Finance Committee, said the revenge tax provision would be stricken from the bill.
“At the request of @SecScottBessent and in light of this joint understanding to preserve US tax sovereignty and allow US tax laws to co-exist with the Pillar 2 regime, we will remove proposed tax code Section 899 from the One Big Beautiful Bill Act, and we look forward to active engagement with Treasury on these important issues,” Crapo wrote on X.
House Ways and Means Committee Chairman Jason Smith (R-Mo.) called the deal a “major victory for American workers.”
Some on Wall Street feared that the provision would discourage global investment in the US.
The Senate’s version of the revenge tax had been projected to raise more than $50 billion in revenues over 10 years, which would’ve helped defray the cost of other spending in the bill.
Trump has urged Congress to pass the bill by July 4.
Bessent said the agreement struck with G7 partners “ provides greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond.”
“By reversing the Biden Administration’s unwise commitments, we are now protecting our Nation’s authority to enact tax policies that serve the interests of American businesses and workers,” he added. “We are also preserving our tax base, preventing the loss of over $100 billion in American taxpayer dollars according to Treasury estimates and the non-partisan Joint Committee on Taxation.”
“The Trump Administration remains vigilant against all discriminatory and extraterritorial foreign taxes applied against Americans. We will defend our tax sovereignty and resist efforts to create an unlevel playing field for our citizens and companies.”
