NAM Pushes Back on Global Minimum Tax Increase
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The NAM is fighting against congressional efforts to increase the minimum tax on U.S. companies’ foreign earnings above the rate recently reached by a global minimum tax deal—thereby putting globally engaged manufacturers at a significant disadvantage.
The context: For a number of years, the Organisation for Economic Co-operation and Development has been leading global tax negotiations that would fundamentally reshape the current international tax system. A centerpiece of the effort is a 15% global minimum tax that more than 130 countries signed off on earlier this month. The deal is intended to be implemented in 2023.
The U.S. angle: The United States already has a global minimum tax, called the global intangible low-taxed income tax, or GILTI, which operates as a minimum tax on the foreign earnings of U.S. multinational corporations. Now, Congress is considering increasing it as part of the reconciliation legislation. In particular, the pending House reconciliation bill would increase the GILTI rate from the current 13.125% tax rate to 17.4%—above the proposed global minimum tax rate.
The problem: The NAM has made clear that the United States shouldn’t move forward with any changes to GILTI before other countries implement a minimum tax, and that the U.S. shouldn’t have a minimum tax regime that results in a higher tax burden than the rest of the world. Such a burden on globally engaged companies would make it more difficult for these companies, including manufacturers, to compete and succeed in the global marketplace.
What we’re saying: “If Congress adopts a harsher tax regime than the rest of the world, it would tilt the scales against manufacturers and manufacturing workers in the U.S.,” said NAM Vice President of Tax and Domestic Economic Policy Chris Netram. “A harsher regime would harm manufacturers, reducing their ability to compete around the world and invest in high-paying jobs here at home.”
Learn more: One NAM study showed that proposed harmful changes to the GILTI regime could cost up to 1 million U.S. jobs.
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Manufacturers Unveil Competitiveness Agenda Ahead of Midterm Elections
“Competing to Win” offers a path for bringing the country together around policies, shared values and a unified purpose
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
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The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org
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