Since the No Tax Breaks for Outsourcing Act and the Stop Tax Haven Abuse Act of 2021 were introduced into the Senate and the House on March 11, there has been significant activity around international taxes. President Joe Biden released his American Jobs Plan (AJP) on March 31. On April 5, Democratic Sens. Ron Wyden, Sherrod Brown, and Mark Warner released a framework to revamp international tax provisions (Wyden-Brown-Warner framework). And on April 7, the U.S. Department of the Treasury provided more detail on the tax portions of the AJP in its report on the Made in America tax plan (Treasury report).
The recent activity primarily focuses on increasing taxes on U.S. multinationals by implementing changes to the tax on global intangible low-taxed income (GILTI), the deduction for foreign-derived intangible income (FDII), and the base erosion anti-abuse tax (BEAT), which were enacted as part of the Tax Cuts and Jobs Act of 2017 (TCJA). The international features of each overlap in many ways, but each includes unique provisions. The coming months are likely to bring many more iterations.
The two most recent proposals set forth in the Wyden-Brown-Warner framework and the Treasury report are indicative of the issues under debate. Although the two proposals are similar, some differences are worth noting.