Supporting Pro-Growth Policies for U.S. Businesses: Jonathan Williams on American Radio Journal
The United States will stand firm on competitive tax policy and will not be coerced into participating in a tax system that stifles growth, damages sovereignty, and threatens tax competition.
On his first day in office, President Donald Trump took decisive action to defend American businesses, workers, and tax competitiveness by signing two executive orders that directly challenged a dangerous global corporate tax scheme. This tax deal was crafted by the Organization for Economic Cooperation and Development (OECD) and was signed under President Joe Biden in 2021, but the provisions were not ratified by Congress. The deal threatened to undermine the tax advantages American companies enjoy and would have imposed a uniform global tax regime that hurt job creators and nations trying to foster economic growth through low taxes.
President Trump’s executive actions delivered a clear message: the United States will stand firm on competitive tax policy and will not be coerced into participating in a tax system that stifles growth, damages sovereignty, and threatens tax competition.
Prior to President Trump’s election, the other nations participating in the agreement were set to increase taxes on American companies by 2026. The Biden tax deal was structured around two key components. The first would raise taxes on the world’s largest corporations, which, in practice, would disproportionately affect American businesses. The second component involved a global minimum business tax rate of 15%, meaning that any multinational company operating in countries with lower taxes would face additional taxes imposed by participating nations.
This global tax minimum would have effectively undermined the ability of nations to set their own tax policies and stifled international tax competition. Had this plan been implemented, it would have raised taxes on American companies, especially those operating in countries with more favorable tax regimes, such as Ireland. These nations have long used low corporate tax rates to encourage investment and job creation, benefiting from tax competition that drives economic growth—just as we did in the United States after the passage of the 2017 Tax Cuts and Jobs Act, or the Trump tax cuts, which lowered corporate taxes from 35% to 21% and produced a groundswell of wage growth and economic activity as companies invested more in America.
Tax competition, which encourages nations to offer lower tax rates to attract businesses, has long been a crucial factor in fostering economic growth and dynamism. The United States itself benefits from internal tax competition among its states, as we document annually in ALEC’s report, Rich States, Poor States. By allowing each state to set its own tax rules, rates, and fiscal policies, our system of federalism fosters healthy competition that drives innovation, improves efficiency, and ultimately benefits all of us as individual taxpayers.
If the federal government were to impose a single, rigid tax policy on all 50 states with a minimum tax rate, it would certainly undermine this competitive dynamic and harm economic growth—especially for states like Texas and Florida, which are leading in free-market economics. The Biden global tax deal sought to accomplish a similar centralization of tax policy on an international scale.
The consequences of a global tax deal like this can already be seen within the European Union, where excessive taxation and burdensome regulations have led to economic stagnation. The eurozone economy has grown by a mere 7% over the past 15 years, compared to 82% in the United States. This stark contrast highlights the dangers of centralized tax policies that discourage competition and stifle economic potential. When countries are forced to implement policies that hinder competitiveness, the result is less opportunity, fewer jobs, and a lower standard of living for all.
These two executive orders by President Trump effectively put the OECD nations on notice: the United States will not allow itself to be swept into a global tax regime that undermines its competitiveness. By standing firm on these issues, President Trump protected American businesses from a tax scheme that would have hurt them both directly and indirectly. He also sent a message to other nations that may consider adopting pro-growth tax policies.
The United States will support tax competition and will not allow international agreements to undermine the ability of countries to adopt policies that foster economic growth. In the long run, President Trump’s executive orders help ensure that the United States remains a competitive force in the global economy. Alongside regulatory relief from the Trump administration and pro-growth tax cuts, as part of the discussion around the renewal of the 2017 Trump tax cuts, 2025 could be a banner year for enhancing American competitiveness—which, of course, is good for all hardworking taxpayers across America.