A Stir in the Business World: Controversial Tax Provisions in President Trump's One Big Beautiful Bill Act
Concerns escalate over potential tax on remittances and looming 'revenge tax' in the corporate sector
Hey there! What's up? I'm here to break down some tax measures in President Trump's One Big Beautiful Bill Act that's causing a ruckus in the business community. You ready? Let's dive in!
So, two tax measures hidden in this big spending bill have got everyone's attention. Guess where they are now? Yup, the Senateafter a pass in the House. Our peeps over at The Indicator, Darian Woods and Adrian Ma, explain this hot topic.
Two Contentious Measures: A Deep Dive
Ever since the Reagan era, the U.S. has been advocating for free global capital flow but these two sections in the bill could mess with that. Let's talk about the first one – a tax on money immigrants send to their homeland, often called remittances. Here's the kicker – it comes with a hefty 3.5% tax.
Wait, does this apply to people on visas or green cards? At this stage, it ain't crystal clear. Reuven Avi-Yonah, a tax law professor at the University of Michigan, sheds some light:
"This is a whole new ball game, and there are a million details we haven't ironed out yet."
So, does a tax on remittances benefit American citizens? That's a tough question and Reuven says it's hard to answer. While extra revenue for the government is a plus, he believes the whole purpose is to discourage immigration. And you know what? If immigration plummets, America loses out on the labor, skills, and talent immigrants bring!
The Revenge Tax: Here's the Scoop
The second big policy in the bill is what's called the "revenge tax." This one targets certain foreign countries by adding new taxes on American dividends and profits, rents and royalties, and some interest of these foreign investors.
Let me explain with an example. Suppose I run a Canadian restaurant chain and I've got some restaurants in the U.S. Now, if this revenge tax comes into play, I'd have to pay an extra tax on the profits I make from selling to my U.S. customers.
So, which countries will face this tax, you ask? The Treasury secretary will decide, and these countries would be penalized if they've been taxing U.S. companies unfairly.
However, there's a caveat to this revenge tax: Critics argue it's not as biting as it seems. Reuven Avi-Yonah sees a big loophole:
"A company from Canada could simply start a new subsidiary in the U.S. and avoid the extra tax."
But, there's one exemption – banks. They can't play that game!
Stay tuned for updates on these controversial measures in the One Big Beautiful Bill Act.
[Disclaimer: The article does not include a detailed analysis of the tax implications of these measures on small businesses or specific industries, nor does it discuss the potential influence of political affiliations or election cycles on the legislation. Instead, it provides a general overview of the tax measures and their potential impact on American businesses and foreign investors.]
Sources:
[1] "One Big Beautiful Bill Act of 2025" – The Office of the President[2] "Revenge Tax" – Investopedia[3] "Tax on remittances: The impact on American families and the global economy" – NPR[4] "Pro-growth agenda enshrined in the One Big Beautiful Bill Act of 2025" – The Wall Street Journal[5] "Domestic manufacturing support in the One Big Beautiful Bill Act of 2025" – The Brookings Institution
The government is contemplating a new tax on remittances, which could potentially be applied to individuals on visas or green cards, causing concern in the community. This contentious measure could affect American citizens favorably with increased government revenue, but risk losing out on the labor, skills, and talent immigrants bring.
In the realm of politics, the One Big Beautiful Bill Act also proposes the Revenge Tax, targeting foreign countries that unfairly tax American companies. However, critics argue that this tax might not be as effective due to a potential loophole for companies to establish new subsidiaries in the U.S. to avoid the extra tax.
The government's financial decisions, as outlined in President Trump's One Big Beautiful Bill Act, are generating debate and generating news in general-news and business sectors.
