U.S. Chamber Staff


March 30, 2022


Fill Me In

The Organisation for Economic Co-Operation and Development (OECD) is advancing a global agreement on taxation designed to address how tax is allocated from businesses operating in multiple countries and establish a global minimum tax. Pillar 1 of the agreement focuses on where companies pay taxes. Pillar 2 of the OECD framework includes the global minimum tax.

Recently, details have emerged about how the Pillar 2 proposal would interact with existing U.S. tax law. As proposed, the global minimum tax would hinder the competitiveness of U.S. companies in global markets and force them to pay taxes to foreign governments.

The global agreement is a top priority of the administration, especially Treasury Secretary Janet Yellen, who led negotiations on behalf of the administration.

Numbers to Know

  • $820 million: U.S. multinational companies with more than $820 million in revenue could lose the ability to fully benefit from quickly writing off new capital investments (expensing / accelerated depreciation) and lose the full value of U.S. tax credits – such as the work opportunity credit, the low-income housing credit, the new markets credit, and the R&D credit – that Congress created to achieve important public policy objectives.
  • 15%: The proposed global tax minimum. If a covered company’s effective U.S. tax rate falls below 15%, other countries could impose a “top-off” tax.


Some in the administration have suggested that existing tax credits be converted to refundable or direct pay credits. Such a move could be both highly complicated to implement and difficult to pass through Congress. 

Our Take

“A global minimum tax is problematic for U.S. businesses because it would result in tax increases for them, which will force them to reduce investment. Less investment leads to fewer jobs and lower wages for American workers.” – Curtis Dubay, Senior Economist, U.S Chamber of Commerce

“The concern at the moment is that we’re heading down the road on an agreement that fundamentally disadvantages U.S. companies because of the combination of a new global minimum tax agreement and how we structure the rest of our tax code and incentives.” – Neil Bradley, Executive Vice President and Chief Policy Officer, U.S Chamber of Commerce

“Some have suggested that Congress could modify U.S. tax credits to a direct payment system. From both a policy and political perspective, the prospects for moving to direct pay are highly uncertain and there is not even a proposal from the administration that would make those changes. Moving forward with this proposal as currently constructed would put U.S. firms at a competitive disadvantage, hinder important public policy goals in areas such as affordable housing, R&D and spurring domestic investment, and result in U.S. companies being forced to pay extra taxes to foreign governments.” – Neil Bradley, Executive Vice President and Chief Policy Officer, U.S Chamber of Commerce

What's Next

While a deal has been struck, it has been facing a lukewarm reception in various parts of the world. On March 15, 2022, several European Union (EU) Finance Ministers rejected a bill, which required unanimous support, that would have introduced this global minimum tax across the EU.

While this proposal stumbles elsewhere in the world, we call on the administration to negotiate the necessary modifications to ensure that our system of domestic tax credits, which Congress has created, do not inadvertently place U.S. companies at a competitive disadvantage.

What We're Doing

The Chamber is working with its members and other business organizations and groups that support impacted tax credits to address this issue.

On March 29th, the Chamber joined Business Roundtable and more than a dozen other trade associations in sending a letter to Secretary Yellen again expressing concerns the business community has with the Pillar 2 framework and calling on Treasury to negotiate modifications to the agreement.

About the authors

U.S. Chamber Staff