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HR591119th CongressWALLET

Defending American Jobs and Investment Act

Sponsored By: Representative Smith (MO)

Introduced

Summary

Would create a U.S. enforcement framework to deter foreign extraterritorial and discriminatory taxes by imposing higher U.S. taxes and trade consequences on affected foreign persons and entities. It would also require Treasury to report on offending countries and press for repeal through bilateral engagement and remedial actions.

Show full summary
  • Foreign citizens, foreign corporations, and certain foreign partnerships would face stepped-up U.S. tax increases and higher withholding on U.S. payments and real‑property dispositions; rates would rise about 5 to 20 percentage points over several years.
  • The Secretary of the Treasury would have to identify and report offending countries, delivering the first list within 90 days and updating it at least every 180 days, then pursue enhanced bilateral engagement to seek repeal or modification.
  • The President could prohibit federal procurement from affected persons, and the Treasury, the U.S. Trade Representative, and Commerce must consider these taxes in tax‑treaty and trade negotiations and notify Congress within 30 days of starting talks.

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 2 benefits, 2 costs, 1 mixed.

Trade and tax talks must consider taxes

The bill would require Treasury, the U.S. Trade Representative, and Commerce to consider covered foreign taxes when starting or updating tax treaties or trade agreements with affected countries. Each agency would notify Congress within 30 days after beginning negotiations and describe how the taxes were considered.

Treasury reports on foreign taxes

The bill would require Treasury to send Congress a report within 90 days and then at least every 180 days. The report would list foreign countries that impose extraterritorial or discriminatory taxes and describe each tax, its rate, and enactment and effect dates. The bill would also require enhanced bilateral engagement with listed countries. Treasury would be able to issue rules and guidance to carry out these duties and to prevent avoidance.

Higher U.S. taxes for listed parties

If enacted, the bill would raise certain U.S. income-tax rates and withholding for 'applicable persons' from listed countries. The increases would follow a schedule: +5 percentage points for year 1, +10 for year 2, +15 for year 3, and +20 points thereafter. Withholding and disposition rates would be set without regard to U.S. tax treaties and then increased. The bill includes a special FIRPTA-related limit that can reduce some added tax for certain nonresident individuals but not below zero.

Which foreign persons are covered

The bill would define who is an 'applicable person' for higher U.S. taxes and withholding. It would include citizens of listed countries who are not U.S. citizens or residents, most foreign corporations taxed by those countries, and some foreign partnerships for withholding. The bill would set the 'applicable date' as the day after a 180-day waiting period after the first Treasury report listing that country. Treasury would stop remedial actions for periods after it reports a country's covered taxes have ended.

President may bar federal purchases

The bill would let the President prohibit federal agencies from buying goods or services from 'applicable persons' in a listed country, starting on the applicable date. The ban would continue until Treasury reports the country no longer has covered taxes. The President would have to notify Congress within 30 days if he takes this action.

Sponsors & CoSponsors

Sponsor

Smith (MO)

MO • R

Cosponsors

  • Buchanan

    FL • R

    Sponsored 1/21/2025

  • Smith (NE)

    NE • R

    Sponsored 1/21/2025

  • Kelly (PA)

    PA • R

    Sponsored 1/21/2025

  • Schweikert

    AZ • R

    Sponsored 1/21/2025

  • LaHood

    IL • R

    Sponsored 1/21/2025

  • Arrington

    TX • R

    Sponsored 1/21/2025

  • Estes

    KS • R

    Sponsored 1/21/2025

  • Smucker

    PA • R

    Sponsored 1/21/2025

  • Hern (OK)

    OK • R

    Sponsored 1/21/2025

  • Miller (WV)

    WV • R

    Sponsored 1/21/2025

  • Murphy

    NC • R

    Sponsored 1/21/2025

  • Kustoff

    TN • R

    Sponsored 1/21/2025

  • Fitzpatrick

    PA • R

    Sponsored 1/21/2025

  • Steube

    FL • R

    Sponsored 1/21/2025

  • Tenney

    NY • R

    Sponsored 1/21/2025

  • Fischbach

    MN • R

    Sponsored 1/21/2025

  • Moore (UT)

    UT • R

    Sponsored 1/21/2025

  • Van Duyne

    TX • R

    Sponsored 1/21/2025

  • Feenstra

    IA • R

    Sponsored 1/21/2025

  • Malliotakis

    NY • R

    Sponsored 1/21/2025

  • Carey

    OH • R

    Sponsored 1/21/2025

  • Yakym

    IN • R

    Sponsored 1/21/2025

  • Miller (OH)

    OH • R

    Sponsored 1/21/2025

  • Bean (FL)

    FL • R

    Sponsored 1/21/2025

  • Moran

    TX • R

    Sponsored 1/21/2025

Roll Call Votes

No roll call votes available for this bill.

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