Loren Ponds Weighs in on Biden Administration's Proposed GILTI Rate Increase in Tax Notes
"GILTI Rate Increase 'Overkill,' Former Ways and Means Counsel Warns"
Loren Ponds, a former majority tax counsel at the House Ways and Means Committee, weighed in on the Biden administration's proposal to increase the global intangible low-taxed income (GILTI) tax rate to 21 percent during a Washington International Trade Association webinar on April 29. In response to the assertion that the changes could bring the U.S. system more in line with a proposed global minimum taxation system under pillar 2 of the Organisation for Economic Co-operation and Development's (OECD) ongoing project to overhaul the international corporate tax rules for the digital age, Ponds said "the proposed increase to the GILTI rate is overkill in terms of what we need for a global minimum tax conversation." Ponds noted there is no reason to apply a 21 percent GILTI tax rate when the OECD-agreed rate likely will be between 10 and 15 percent. "The administration probably wouldn't describe it this way, but they are somewhat, not constrained, but at least beholden to . . . what's happening at the OECD," said Ponds. "We can't just go off on our own and say, 'We're going to do this, and . . . you guys figure it out.' . . . There hopefully will be some tempering of some of the more egregious proposals . . . because of what's happening on the global stage."