Trump-Backed Tax Bill Targets Foreign Digital Taxes

The tax bill currently under review at Congress would grant President Donald Trump the power to impose retaliatory taxes on countries that tax major U.S. tech companies including Amazon and Alphabet.

The provision Section 899 enables the administration to identify discriminatory foreign countries which would lead to additional tax rates up to 20 percentage points annually for designated countries and their U.S. operating companies.

Representative Ron Estes who supports the measure stated that foreign nations should face tax consequences when they impose taxes on American businesses.

The provision within the Republican-led tax and spending package would generate $116 billion during the next ten years according to the Joint Committee on Taxation. The retaliatory tax plan has received no opposition from Democrats despite their rejection of most bill provisions including Trump's immigration measures and green energy cuts.

The proposed measure faces criticism because it could reduce foreign investment in the U.S. and intensify trade conflicts which would negatively affect economic growth during a time of economic uncertainty caused by Trump's tariff policies.

The House approved the bill with a slim margin before it advances to the Senate for intense discussions. The result of this decision will establish new methods for the United States to respond against unfair tax practices of its trading partners.