As Congress is working to advance President Donald Trump’s sweeping legislative agenda, a controversial tax provision known as the “899 revenge tax” sparked fierce debate and deep concern across the business community. This measure, embedded in recent budget and tax legislation, specifically targeted what the administration described as unfair foreign taxes—most notably the OECD’s Pillar 2 framework and digital services taxes.
The OECD’s Pillar 2 plan, which called for a 15% minimum tax rate on large multinational corporations, was designed to capture more revenue from global tech giants, including major U.S. firms. However, critics warned that the U.S. response, Section 899, risked significant collateral damage. The Global Business Alliance warned that the proposal would cost the United States 700,000 jobs and $100 billion in annual GDP over the long term, stating, “This tax specifically punishes companies that invest, build and hire in the U.S.—particularly in manufacturing and R&D. It will also lower U.S. wages, total investment and labor supply,” according to the organization.
Wall Street voiced strong objections, warning that the measure would deter foreign investment—a vital source of capital for commercial real estate lenders. According to a market analysis, the inclusion of Section 899 threatened to create a severe shortfall in commercial real estate funding, as international investors would likely look elsewhere.
Initially, the provision was included in the House version of the bill. But as the debate intensified, Treasury Secretary Scott Bessent intervened, urging Republican leaders in both chambers to drop the measure. Bessent, writing on X, emphasized that the administration had worked closely with other countries on the OECD Global Tax Deal and that the G7 nations would soon “announce a joint understanding.” He assured that OECD Pillar 2 taxes would not apply to U.S. companies, addressing one of the main concerns behind Section 899. “This understanding with our G7 partners provides greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond,” Bessent said.
Following Bessent’s intervention, Senate Finance Committee Chairman Mike Crapo (R-Idaho) and House Ways and Means Committee Chairman Jason Smith (R-Missouri) confirmed that their respective committees had removed the controversial language from the bill, according to statements they released at the time.
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