McLean County Times

U.S. Rep. Darin LaHood (R-Ill.) recently raised concerns over proposed changes to how income earned by foreign affiliates of U.S. companies from intangible assets is taxed, saying it would encourage businesses to keep assets outside of the U.S.

The minimum tax on Global Intangible Low-Taxed Income (GILTI) applies to assets such as patents, trademarks and copyrights, according to the Tax Policy Center. The 2017 Tax Cuts and Jobs Act encouraged U.S. companies to repatriate earnings that would have been taxed once those funds were brought back into the country.

"GILTI is calculated as the total active income earned by a U.S. firm's foreign affiliates that exceed 10% of the firm's depreciable tangible property," the Tax policy Center post stated. "A corporation (but not other businesses) can generally deduct 50% of the GILTI and claim a foreign tax credit for 80% of foreign taxes paid or accrued on GILTI."

President Joe Biden wants to double the minimum tax on GILTI, LaHood said in a video shared on his Twitter. He said he was concerned about how that would affect the competitiveness of U.S. companies in comparison to foreign businesses.

"You look at, obviously, the benefits of [Tax Cuts and Jobs Act] and fixing the territorial system, and the amount of money that's been repatriated back to this country, it's really been astonishing, well over $3 trillion," LaHood said in the video.

LaHood tweeted that tax hikes are particularly risky as U.S. businesses continue to struggle to recover from the economic crisis created by COVID-19 restrictions.

LaHood also raised concerns about the impact of proposed tax increases proposed by Democrats that could affect the cost of utilities.

"Including a carbon tax, carbon border tax and punitive taxes on U.S. energy," LaHood said. "As we've seen already, energy costs have gone up, and I worry about losing our energy independence."