Wall Street and Businesses Raise Alarm: New Tax for Foreign Investors Could Shake Up the U.S. Market

Republicans in the U.S. Congress are pushing a new tax package that has sparked concerns among companies and investors alike. At the heart of the debate is Section 899, a provision that could significantly increase taxes for foreign corporations operating in the U.S. — up to 20%. And that’s exactly why both Main Street and Wall Street are pushing back. 🔹 Who’s affected? Almost everyone — from European corporations to investment funds from Canada, Australia, and Japan. And the worries are real: the new tax could apply to profits from rents, real estate sales, and securities investments. 🔹 Why the increase? The U.S. is responding to foreign digital taxes it sees as unfair. But the side effects might be broader than anticipated.

💼 Nearly 200 Companies at Risk Representatives from companies like Shell, Toyota, SAP, and LVMH are already sounding the alarm — some of them are scheduled to meet with members of Congress this week to challenge Section 899. They warn that up to 8.4 million U.S. jobs could be at risk. David McCarthy from the CRE Finance Council warns the new tax framework could decrease the value of commercial real estate, as funding for purchases could dry up. Beth Zorc, CEO of the Institute of International Bankers, cautions: “Section 899 could suppress direct foreign investment, destabilize the financial market, and jeopardize jobs across the U.S.”

📉 Investments on Hold, Wall Street Shaken The proposal could affect nearly $40 trillion in U.S. assets held by foreign investors, including treasuries, corporate loans, and deposits. Dividends and interest could be newly taxed at 5% annually over four years. Some legal experts say investors are already pausing planned U.S. investments until more clarity emerges. Even sovereign wealth funds, which were previously exempt, could be affected.

📊 Billions in New Revenue, Trillions in Debt Section 899 could generate $116 billion in tax revenue over the next decade. But according to the Congressional Budget Office, the entire budget proposal would increase the U.S. deficit by $2.4 trillion by 2034. While Republicans see the law as a way to punish unfair foreign tax policies, business leaders warn the consequences for the U.S. economy could be severe and long-lasting.

#WallStreet , #GlobalMarkets , #TaxPolicy , #USPolitics , #tax

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