Right now, the United States is leaking money. And not in small amounts—we’re talking $100 billion every year. That’s the cost of letting multinational corporations shuffle their profits into tax havens, where they pay little to nothing. It’s a trick enabled by outdated tax rules that allow companies to pretend their profits were earned wherever tax rates are the lowest, even when their customers and workers are here at home.
This isn’t just a number on a spreadsheet. It’s $100 billion that could be used to pay down the national debt, fund new infrastructure, or provide tax relief for middle-class Americans struggling with the rising cost of living. Instead, middle-class families and small businesses end up carrying more of the burden while some of the wealthiest companies in the world skate by.
It doesn’t have to be this way. There’s a plan—a globally backed one, in fact—to put a stop to this. The OECD’s Pillar agreements are designed to make sure corporations pay taxes where they actually do business, not just where they park their headquarters. At the same time, they set a global minimum corporate tax rate of 15%, so countries can’t just slash taxes in a “race to the bottom” to attract big companies.
But here’s the challenge: getting this through Congress. The concern, particularly among conservatives, is that these agreements might make the U.S. less competitive, discouraging investment and job creation. That’s where we need a smart balancing act—one that combines these global reforms with powerful incentives for domestic investment.
The Case for a Balanced Approach
Let’s start with the OECD agreements. They tackle one of the biggest problems in our tax system: profit shifting. Right now, companies can register intellectual property in tax havens and then charge their U.S. operations hefty fees for using it, making their U.S. profits “disappear.” These agreements would put an end to that, ensuring companies pay their fair share where they actually operate.
But critics raise a valid point: what if these changes push companies to invest less in the U.S.? That’s why we need to pair the Pillar agreements with something that boosts investment and growth here at home—like full expensing for research and capital investments.
Full expensing sounds wonky, but it’s simple: it lets businesses immediately deduct the cost of investments like new equipment or research and development. Instead of dragging those deductions out over years, companies can write them off right away, making it cheaper and easier to grow. This isn’t just theoretical—it’s been shown to boost GDP and create hundreds of thousands of jobs.
Why This Matters
Think about the big picture. When corporations shift profits offshore, the rest of us pay the price. Local businesses compete on an uneven playing field, workers miss out on opportunities, and the government is left with fewer resources to invest in everything from schools to clean energy.
The Pillar agreements fix this problem by leveling the global tax playing field. And by adopting them, the U.S. wouldn’t just be protecting its own tax base—we’d be setting an example for the world. If we lead, other countries will follow, and that strengthens the global economy as a whole.
At the same time, full expensing ensures that we don’t just plug revenue leaks—we grow the pie. By making it easier for companies to invest in innovation and expansion, we can ensure that the U.S. remains the best place in the world to do business.
The Bottom Line
This isn’t about punishing corporations or picking winners and losers. It’s about fairness and balance. It’s about making sure everyone pays their share while giving businesses the tools they need to thrive.
Congress has a chance to do something big here: to protect federal revenues, support American workers, and make our economy stronger and fairer for the long haul. But it takes a balanced approach—one that combines the Pillar agreements with pro-growth policies like full expensing.
The stakes couldn’t be higher. If we don’t act, the “race to the bottom” will continue, draining resources and widening inequality. But if we do this right, we can secure America’s economic future while showing the world what smart, fair tax policy looks like. It’s a win-win—and it’s time to make it happen.
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