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Feb 22, 2022 View in browser   By Bernie Becker THE LATEST BUGABOO: The business community and congressional Republicans have locked into a new potential problem spot with the global tax deal championed by President Joe Biden's administration. Treasury Secretary Janet Yellen has suggested that multinational corporations would end up getting behind the global agreement negotiated through the Organization for Economic Cooperation and Development, arguing that the certainty offered by the new framework would outweigh any potential downsides. But just last week, Neil Bradley of the U.S. Chamber of Commerce said his group was growing increasingly worried that the OECD agreement would "fundamentally disadvantage" American multinationals, as Bloomberg reported. A Chamber spokesperson later confirmed that Bradley was referring to a part of the deal that could undercut companies' ability to use popular tax incentives, like for research and development or low-income housing, and even open them up to higher taxes from other countries. A group of Senate Republicans — all 14 on the tax-writing Finance Committee, in fact — made much the same point in a letter to Yellen last week, saying the evidence was growing that the administration had cut a deal that " will harm U.S. businesses and jobs." Here's the issue for companies, as explained by the Tax Foundation's Daniel Bunn — the OECD agreement's Pillar Two mandates that multinationals pay at least a 15 percent corporate tax rate, which means that companies could rely on tax breaks only until they reach that threshold. On top of that, something called the undertaxed payments rule, or UTPR, gives other countries the latitude to tax those multinationals whose effective rate in their home country dips below 15 percent. MORE ON THAT in a bit, but first thanks for joining a very special "how many two's can you fit in one date" edition of Weekly Tax. Many pounds of pounds: Today marks 16 years since the biggest ever cash robbery to occur in the U.K., when some 53 million pounds were stolen from a Securitas depot in Tonbridge, England. (The robbers had to leave behind another 154 million pounds because they couldn't carry it. Around a half-dozen people eventually received long prison sentences for the robbery). Please, weigh us down with as many scoops as you have. Email: bbecker@politico.com, alorenzo@politico.com, bfaler@politico.com and teckert@politico.com. You can also reach us on Twitter at @berniebecker3, @aaronelorenzo, @tobyeckert, @Brian_Faler, @POLITICOPro and @Morning_Tax.   JOIN THURSDAY TO HEAR FROM MAYORS ACROSS AMERICA: The Fifty: America's Mayors will convene mayors from across the country to discuss their policy agendas, including the enforcement of Covid measures such as vaccine and mask mandates. We'll also discuss how mayors are dealing with the fallout of the pandemic on their local economies and workforce, affordable housing and homelessness, and criminal justice reforms. REGISTER HERE.     Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. SO WHAT TO DO ABOUT THAT? The global minimum tax is scheduled to go into effect in 2023, and governments around the world are hurrying to make that possible. Lobbyists say that makes it imperative for Treasury to move quick — it will be harder for the U.S. to object, they argue, once more and more countries make changes based on the agreed-upon template for the global minimum tax. Lobbyists also acknowledge that it would likely take some prodding from congressional Democrats for Treasury to renegotiate the part about the UTPR — and that any successful pressure would be more likely to be private than public. The going theory within at least pockets of K Street is that Democrats might be willing to nudge the administration on this issue because they so value the tax credits that could be undercut because of the minimum tax rules — and have fought to protect them in other situations. Now how much of that is wishful thinking? For its part, Treasury continues to do nothing but plug the global tax agreement and its benefits for American companies. It's also worth noting that more than a dozen Democratic lawmakers expressed concern about proposed expansions of an existing corporate minimum tax, the levy on Global Intangible Low-Taxed Income, in the House version of Biden's Build Back Better agenda. It's still early, but Democrats haven't made anywhere near that kind of public noise one way or the other about the tax credit issue. (And in the end, none of the Democrats who questioned the GILTI changes voted against the House bill). One group popular with Democrats, the Tax Law Center, which was founded in part last year by a pair of New York University law professors now in the Biden administration, has spoken out to say that the concerns about the UTPR and tax credits are overblown. "Even though businesses have chosen now to highlight it, the potential applicability of the undertaxed payment rule top-up tax is not new, and it's just a function of the way that minimum taxes work," the group's Rose Jenkins said. "The question of whether certain credits should nevertheless get special treatment is no different from many other implementation issues that will need to be worked through." One last point: It's not totally clear what method might need to be used to tweak the global agreement to deal with these concerns, should it ever get to that point. But the OECD is expected to roll out new commentary for the minimum tax pretty soon, which could also give further insight into how the UTPR (and other parts of Pillar Two) might work. OTHER MATTERS TO CONSIDER: The IRS made it official on Monday that taxpayers trying to access their online account could use a virtual interview, instead of undergoing a facial recognition process, as The New York Times reported. Looking ahead, the tax collector also said that it was working to ensure that Login.gov, an authorization site already in use for other government websites, could be used to access online taxpayer accounts by next year's filing season. Quick BBB check-in: There's still no real developments to speak of when it comes to the Democrats' climate and safety net package. It's also not clear what path forward there is for the monthly child payments that Democrats enacted in 2021. But the expanded Child Tax Credit's advocates are pointing to new research that found child poverty sharply increased after the monthly payments expired. "We let a lifeline for tens of millions of children disappear," said Sen. Michael Bennet (D-Colo.), who said the new research should serve as "a wake-up call for Congress and the White House." Around the World IT'S COMPLICATED: Singapore very much wants the rich to pay more in taxes, its finance minister told CNBC. But the government there also says it has to worry about potentially driving investments and money out of Singapore. The country's 2022 budget, released on Friday, includes higher taxes aimed at the rich on items like real estate and luxury cars, as well as a tax rate hike that would hit the top 1.2 percent. As for taxes on wealth, Finance Minister Lawrence Wong said Singapore is looking "very closely" at potential changes like higher taxes on capital gains, dividends or even a net wealth tax. Still, Wong also noted that wealth taxes have only become less popular over the last several decades, particularly in Europe, and noted that tabulating the wealth of the very rich can be a "very complex exercise." Singapore mostly taxes the wealthy through property taxes now, and the latest budget would raise the top rate to 36 percent eventually on properties not occupied by the owner. Around the Nation NOT ON THE SAME PAGE: Virginia is one of just a couple states where Democrats and Republicans each control a legislative chamber — and that shows in the state's current debate over taxes , as The Richmond Times-Dispatch reports. Gov. Glenn Youngkin, a Republican, has proposed doubling the standard deduction for individual taxpayers, scrapping the sales tax for groceries and holding off on a proposed increase in the gas tax. The state House, which flipped to the GOP in November, largely has embraced Youngkin's tax-cutting ideas, in a budget that passed its appropriations panel. But the Democratic state Senate isn't really going along, though it did pass one-time direct payments also sought by Youngkin. Instead, the state Senate has looked to make Virginia's earned income tax credit partly refundable, something that the former Democratic governor, Ralph Northam, also proposed. Youngkin has said the Senate isn't proposing "nearly enough tax relief," but stressed that he sees a path to reconciling the two legislative budgets.   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.     Quick Links NBC News: Sen. Mitt Romney's (R-Utah) "push to revive child tax credit hinges on work requirements." Bloomberg: "UAE Income Tax Is Not on the Table for Now, Says Minister." Associated Press: " Income-tax phaseout up for debate in long-poor Mississippi." Did You Know? English, Malay, Mandarin and Tamil are all official languages of Singapore.   Follow us on Twitter Toby Eckert @tobyeckert Bernie Becker @berniebecker3 Brian Faler @brian_faler Aaron Lorenzo @aaronelorenzo   Follow us

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