Scoop: Treasury officials defend "revenge tax" from wary GOP senators

Top Treasury officials are privately explaining to GOP senators that Section 899 of the House-passed budget bill is already forcing foreign countries to the negotiating table. The provision is being called a "revenge tax" by critics, but the Trump administration sees it as a tool to help negotiate better deals for American multinational corporations. The Trump administration is signaling a willingness to make changes to the provision, but is also making the case for why it should stay in the budget bill. Some Republican senators, including Sen. Thom Tillis, have expressed reservations about the provision, citing concerns about its impact on the economy. Section 899 is an attempt to give the White House more power to negotiate with the Organization for Economic Co-operation and Development, which has been critical of Trump's trade policies. The provision is designed to penalize countries that impose taxes on U.S. companies, including a global minimum tax of 15% as well as a digital services tax. The U.S. can increase tax rates for foreign direct investment on countries it claims have unfair tax policies, which has Wall Street worried about the potential harm to U.S. assets and the broader economy. However, there is some indication that European countries are open to modifying their policies to mollify the Trump administration. A coalition of trade associations is calling for the removal of the provision, arguing that it would undermine American jobs, innovation, and long-term economic growth. The Trump administration is arguing that Section 899 might never have to be used, with House Ways and Means Chair Jason Smith stating that "hopefully it'll never take an effect."