Explicame: ‘Revenge tax’ set to hit passive income at 50%, analysts warn

The ‘Revenge Tax,’ officially known as Section 899, emerges as a controversial component of President Donald Trump’s ambitious legislative proposal, the ‘One Big Beautiful Bill Act.’ This measure, driven by House Republicans and endorsed by Trump, targets foreign investors from nations deemed to impose ‘unfair’ or ‘discriminatory’ taxes on U.S. businesses. The tax aims to deter these countries from maintaining such fiscal policies, urging them to engage in negotiations.

Section 899’s primary objective is to penalize foreign investors by expanding the Base Erosion and Anti-Abuse Tax (BEAT), which prevents corporations from shifting profits abroad to evade taxes. The provision allows the U.S. to incrementally increase existing taxes on countries with ‘unfair foreign taxes’ by 5 percentage points annually, capping at 20 points above the legal rate. This could lead to passive investment income facing a U.S. withholding tax as high as 50% in certain scenarios.

The tax would apply to dividends, interest, and royalties earned by foreign investors from countries labeled as ‘discriminatory.’ However, exceptions exist for foreign pension funds and charitable organizations. Notably, U.S. Treasury bonds and portfolio interest remain unaffected. This measure could raise interest costs for some U.S. borrowers, as many loan agreements include ‘gross-up’ clauses, requiring borrowers to cover tax increases enacted post-agreement.

Yet another bad idea in the One Big Hideously Ugly Bill Act!

https://www.msn.com/en-us/news/politics/revenge-tax-set-to-hit-passive-income-at-50-analysts-warn/ar-AA1GjMyP

MSNBC: Trump’s White House accidentally admitted the truth about its tax plan [Opinion]

Earlier this week the White House published evidence that the president’s “big, beautiful bill” hikes taxes on the poor to cut taxes for the rich.


The subtitle say it all: “hikes taxes on the poor to cut taxes for the rich”!


https://www.msnbc.com/opinion/msnbc-opinion/trumps-white-house-accidentally-admitted-truth-tax-plan-rcna207301

Rolling Stone: Trump Lies That His Bill Cuts Taxes For Everyone, When It Raises Them on the Poor

One of the main priorities of the reconciliation package is to codify Trump’s 2017 tax cuts – which heavily favored wealthy Americans – into permanent law. But the tax package produced by the House Ways and Mean Committee won’t actually reduce taxes for all Americans. In fact, it will raise taxes on the poor. 

According to an analysis by Congress’ Joint Committee on Taxation, Trump’s reconciliation bill will raise taxes on Americans earning under $15,000 in 2027. By 2029 and going forward, the legislation will continue to increase taxes on those individuals, as well Americans earning between $15,000 and $30,000. 

Millionaires, meanwhile, will see tax cuts in each year included in the analysis. In two of four years, according to the JCT analysis, millionaires will see a larger average decrease in their tax rate than Americans will overall.

https://www.rollingstone.com/politics/politics-news/trump-lies-tax-cuts-rich-increase-poor-1235341367