Lawmakers remove 鈥榬evenge鈥� tax provision from Trump’s big bill after Treasury requests its removal
Jun 26, 2025, 2:38 PM
Treasury Secretary Scott Bessent talks to reporters about his lunch meeting with Republican senators and the schedule for getting the Republican megabill to President Donald Trump's desk by July 4, at the Capitol in Washington, Tuesday, June 24, 2025. (AP Photo/J. Scott Applewhite)
Credit: ASSOCIATED PRESS
(AP Photo/J. Scott Applewhite)
WASHINGTON (AP) 鈥� Congressional Republicans agreed to remove the so-called revenge tax provision from President Donald Trump鈥檚 big bill Thursday after Treasury Secretary Scott Bessent asked members of Congress to do so earlier in the day.
The Section 899 provision would allow the federal government to impose taxes on companies with foreign owners, as well as investors from countries judged as charging 鈥渦nfair foreign taxes鈥� on U.S. companies.
The measure was expected to lead many companies to avoid investing in the U.S. out of concern that they could face steep taxes.
Bessent said in an X post that he made the request to lawmakers after reaching an agreement with other countries on the Organization for Economic Co-operation and Development Global Tax Deal. He said that after 鈥渕onths of productive dialogue,鈥� they would 鈥渁nnounce a joint understanding among G7 countries that defends American interests.鈥�
After he made the request, Senate Finance Committee Chairman Mike Crapo, R-Idaho, and House Ways and Means Committee Chairman Jason Smith, R-Missouri, said 鈥渨e will remove proposed tax code Section 899鈥� from the bill and 鈥淐ongressional Republicans stand ready to take immediate action if the other parties walk away from this deal or slow walk its implementation.鈥�
The removal of the provision will provide 鈥済reater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond,鈥� Bessent said in his post.
An analysis by the , a trade group representing international companies such as Toyota and Nestl茅, estimates that the provision would cost the U.S. 360,000 jobs and $55 billion annually over 10 years in lost gross domestic product.
The Global Business Alliance was among several groups that signed a letter addressed to Senate Majority Leader John Thune of South Dakota and Senate Finance Committee Chairman Mike Crapo of Idaho, warning of the consequences of Section 899.
The removal of the provision adds a wrinkle to Republicans’ plans to try to offset the cost of the massive package. The non-partisan Congressional Budget Office estimates that the bill would spike deficits by at least $2.4 trillion over the next decade.
Republicans are rushing to finish the package this week to meet the president’s Fourth of July deadline for passage.
Earlier Thursday, the Senate parliamentarian advised that a Medicaid provider tax overhaul central to the spending bill does not adhere to the chamber鈥檚 procedural rules, delivering a crucial blow to Republicans, who are counting on big cuts to Medicaid and other programs to offset trillions of dollars in Trump tax breaks.
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