§896 Adjustment of Tax on Nationals, Residents, and Corporations of Certain Foreign Countries

Summary

When a foreign country taxes Americans more harshly than the United States taxes that country's people, the President can strike back through the tax code. If the President finds that U.S. citizens or companies face more burdensome taxes on income from a foreign country than that country's residents face on similar U.S. income, and the country refuses a U.S. request to fix it, the President can proclaim that pre-1967 tax rules will apply to that country's residents and corporations. Separately, if Americans are being taxed at a higher effective rate than the country's own people in similar circumstances, the President can adjust the U.S. tax rate on that country's nationals, residents, and corporations to match. If the foreign country later changes its laws and removes the unfair treatment, the President proclaims that the adjustment ends. Before issuing any proclamation, the President must notify the Senate and House of Representatives at least 30 days in advance.