Senate's Retaliatory Tax Plan: Less Bite, Broad Reach

As the Republican's self-imposed July 4th deadline for the One Big Beautiful Bill Act ("OBBBA") nears, attention is focused on the Senate Parliamentarian, who is determining which provisions procedurally can be included in a reconciliation bill, and on key Republican Representatives and Senators who are trying to agree on what can pass Congress. One provision in the House-passed version ("the House Bill") which is discussed here) that the Senate Finance Committee has proposed to modify ("the Senate Bill") involves the retaliation against unfair foreign taxes (§899). In essence, §899 increases certain tax rates applied to foreign persons with US investments based on their country of residence (or that of their owners) and applies an enhanced base erosion and anti-abuse tax (BEAT) for certain foreign-owned corporations. Given the inclusion of this provision in both the House Bill and the Senate Bill, §899 appears likely to be included in the final reconciliation bill.