The proposed 20% surcharge on foreign investors’ U.S. income under Section 899 in the Republican tax bill faces opposition from business and financial industry groups. The proposed tax measure Section 899 would generate $116 billion during ten years but industry groups from real estate to banking express strong opposition.
The proposed tax faces opposition because it could reduce foreign investment in U.S. assets while slowing down economic development. The tax lobbying efforts have reached their peak according to Jeff Paravano who serves as a tax lawyer and former Treasury official while some clients delay their deals until the tax regulations become clearer.
The Senate Finance Committee Chairman Mike Crapo who works closely with President Trump has refused to provide any statements about the current negotiations. The White House maintained complete silence regarding the matter.
The $40 trillion worth of U.S. assets owned by global investors demonstrates how market disruption could occur if the tax passes into law. According to Linklaters partner Gabriel Grossman the proposed tax would create a major obstacle for capital market freedom.
The tax bill has triggered a political dispute between Trump and Tesla CEO Elon Musk which increases the uncertainty surrounding this contentious package that plans to transform foreign investment in America.
