Republican Senator Thom Tillis said he expects the implementation of the Section 899 “revenge tax” in President Donald Trump’s massive tax and spending bill to be delayed as it faces pushback from Wall Street and businesses.
The additional tax, as currently written in the bill, would go into effect on Jan. 1 for companies located in some foreign countries, if Congress remains on course to pass the legislation this summer. But Tillis, a moderate who has been heavily involved in negotiations, suggested Tuesday that more time is needed to implement the provision.
“At the very least I expect a delay,” Tillis told reporters.
The provision in the House-passed bill would increase tax liabilities for foreign investors whose home countries are deemed as a “discriminatory foreign country.” Senate Majority Leader John Thune has said senators would review the language in the House bill to ensure it is “pro-growth.”
Wall Street analysts are warning the provision would create another disincentive for foreign investors at a time when their confidence in US assets has already been shaken by Trump’s erratic trade policies and the nation’s deteriorating fiscal accounts. Congress’s own official tax scorekeeper is forecasting the provision would reduce foreign investment in the US.
House lawmakers have said the bill would not apply to portfolio interest such as that earned on Treasury bonds. Senators have said they want to further clarify that exemption.
