|On April 5, over 30 national community development associations and trade organizations sent a letter to Treasury Secretary Janet Yellen, detailing the industry’s concerns over a proposed rule for a global minimum tax. The proposal is part of a two-pillar international tax reform plan released by the Organization for Economic Cooperation and Development (OECD), an intergovernmental organization that acts as a strategic advisor to the G20 international forum. In the letter, advocates, including the ACTION Campaign, co-chaired by Enterprise, note that the proposal would negatively impact critical investment in key domestic tax programs, including the Low-Income Housing Tax Credit (Housing Credit), New Markets Tax Credit (NMTC), and the proposed Neighborhood Homes Tax Credit.
The objective of the international plan is to address the challenges arising from the digitalization of the economy by ensuring that large companies pay taxes where they operate and earn profits through the creation of a global minimum tax of at least 15 percent. In the letter to Secretary Yellen, advocates warn the minimum tax could discourage investor participation in critical affordable housing and community development programs incentivized through the tax code in the United States. Senate Finance Committee Republicans also weighed in on the matter, expressing their opposition to the OECD agreement. A handful of countries have also opposed the global minimum tax threshold, citing concerns that it might “undermine their ability to entice international companies to their shores and would represent a direct threat to their national sovereignty.”