Rep. Estes Publishes Op-ed Rejecting Biden Admin’s Pillar 2 Push

This week, Rep. Ron Estes (R-Kansas) published an op-ed in The Telegraph discussing the Biden administration's misguided attempt to put last minute pressure on countries to move forward with the adoption of the OECD Pillar 2 rules.

"The Trump administration and Congress will govern with a mandate for change, and it seems obvious that our allies should take note of the coming shifts in Washington," writes Rep Estes. "I, along with my Ways and Means colleagues, have been in contact with the representatives of several countries who are questioning the timing and the sense of shifting the goalposts this late in the game. In short, our message to them is clear: don't do it. While the Biden administration may promise adoption by the US, they can't ignore the US Constitution, and House Republicans won't agree to rules that harm our innovators, job creators and workers."

You can read the op-ed here or below.

US allies shouldn't ignore our new direction on tax

Foreign allies, take note. In the United States, our constitutional republic ensures that Americans can change the direction of our country every two years. Every member of the House of Representatives is on the ballot in even-numbered years, along with a third of the Senate. And of course, we elect the president every four years.

So after November, when Republicans flipped the Senate and the White House and maintained control of the House, it should be apparent that Americans have rejected the direction the country has been going in under Democrats and the Biden administration.

Yet the Biden administration is working overtime to cement its bad policies before noon on January 20, when President-elect Trump is sworn in. This includes a push for foreign countries to accept the terms of a poorly negotiated agreement by the Organisation for Economic Co-operation and Development (OECD).

My House Ways and Means colleagues and I have long warned that the Pillar 2 agreement, which mandates a global minimum tax, implements the unfair undertaxed profits rule, and unfavourably treats US tax credits, is detrimental to our country's tax sovereignty, American ingenuity, the federal treasury and our national economy. In fact, even when Democrats had a majority in Congress, they would not pass the Biden administration's ill-conceived plan.

But the current administration is ignoring the constitutional mandate that all tax policy originates in the House, and they are ignoring the will of the American people.

President Biden, Treasury Secretary Yellen and their outgoing DC allies are trying to pressure several countries to move forward with the adoption of the OECD Pillar 2 rules in an effort to gain a critical mass of compliant countries. This will make it harder for American job creators in the new year, and it will also isolate these countries when the Trump administration takes over.

If these countries move forward with Pillar 2, US companies will be forced to report the impact of the proposed guidance in their financial statements. This could distort the market and be misleading to investors, especially when the US adopts a different approach to the OECD under the new administration. Companies may be required to make significant write-offs now, only to reverse them a quarter or two later when the US affects change at the OECD.

And while trade has been a low priority for the current administration, trade and negotiations were a hallmark of the previous Trump administration. Make no mistake, President Trump will look at expanding trade opportunities with friendly foreign nations. There's no reason any country should adopt the egregious Pillar 2 rules negotiated by an administration rejected by voters.

The Trump administration and Congress will govern with a mandate for change, and it seems obvious that our allies should take note of the coming shifts in Washington. I, along with my Ways and Means colleagues, have been in contact with the representatives of several countries who are questioning the timing and the sense of shifting the goalposts this late in the game. In short, our message to them is clear: don't do it.

While the Biden administration may promise adoption by the US, they can't ignore the US Constitution, and House Republicans won't agree to rules that harm our innovators, job creators and workers. Tax and trade policy will take a new direction in 2025 thanks to voters across the country. Our allies would be best served by partnering with the incoming administration, not the one halfway out the door.

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