October, 08 2021, 01:52pm EDT

For Immediate Release
Contact:
Clark Gascoigne
Phone: (202) 813-0290
Global Tax Deal Advances, But Questions Persist
While OECD Framework is Historic, Certain Process and Proposed Revenue Allocation Details Raise Political Viability Concerns
WASHINGTON
A revised and "more final" two-pillar framework to create a global agreement on the taxation of multinational enterprises (MNEs) in a more digitalized and global economy was made public today (the Framework), further advancing efforts under the Organization for Economic Cooperation and Development's (OECD's) Inclusive Framework. While the Framework represents a paradigm shift in the way that MNEs are taxed--allocating the right to tax certain excess profits of very large MNEs to "market" jurisdictions and creating a global minimum corporate tax-- Friday's Framework raises concerns about the long-term political viability of this two-pillar global tax solution.
"This OECD framework represents a critical opportunity to begin to dismantle U.S. and international systems of tax dodging and financial secrecy that exacerbate inequality, lead to corruption and undermine our national security, democracy, and tax base," said Ian Gary, Executive Director of the Financial Accountability and Corporate Transparency (FACT) Coalition. "Without heeding the calls of developing countries to more equitably share in the revenues raised by implementation of the agreement, though, the political viability of a final agreement over time may be in doubt."
The Framework comes on the heels of the Pandora Papers being released by an investigative journalist consortium over the weekend, exposing anew the ways in which the very wealthy, world leaders, and MNEs are able to participate in a separate and secretive "offshore" financial economy. This facilitates tax evasion, corruption, and illicit financial flows, and robs governments of the funds needed to respond to global challenges like persistent inequity, climate change and the COVID-19 pandemic.
"The world can't have two systems - one for hardworking people who pay their taxes, and the other for the global rich and multinational corporations who don't," said Gary. "Multinationals and global elites are using offshore financial secrecy and perverse results of a global tax race to the bottom to dodge taxes and escape accountability, and it's encouraging to see collective action that addresses these concerns."
Friday's Framework advances an earlier, incomplete framework from July that 136 of 140 Inclusive Framework jurisdictions have joined, including early holdouts Ireland, Estonia, and Hungary. Among other open questions answered from July, the Framework indicates that 25% of the excess profits (that is, in excess of profit margins of 10%) of the world's largest MNEs will be reallocated among market jurisdictions to afford taxing rights based on the location of consumption or use of goods or services under Pillar 1. Local digital service taxes must be removed and no new such taxes may be implemented until the earlier of 2024 or the implementation of Pillar 1 via a multilateral convention.
Further, the Framework more definitively creates a 15% minimum global corporate tax rate for large MNEs under Pillar 2 (removing language from the July framework that indicated a rate of "at least" 15%). The minimum tax works by allowing headquarter countries of MNEs to impose a "top-up" tax on low-taxed income of constituent entities on a country-by-country basis (called, the Income Inclusion Rule or IIR), and it is made clear that the U.S. global intangible low-taxed income (GILTI) tax will likely not comply with this standard unless it is amended to apply on a country-by-country basis (as is currently being proposed by the President and the Build Back Better Act). An undertaxed payment rule (UTPR) denies deductions or requires an equivalent adjustment for low tax income of a constituent entity that is not subject to tax under an IIR, and is subject to certain extended transition periods for MNEs with more limited foreign activities. Additional details were also provided with respect to the substantive carveout provided under Pillar 2 for tangible assets and payroll activities in relevant jurisdictions.
Additionally, the separate treaty-based subject to tax rule rate (STTR) was set at 9%, allowing paying (source) jurisdictions to impose limited top-up taxation on certain undertaxed related party payments. It remains unclear if these payments will include payments for services and capital gains. Remaining open under both Pillar 1 and Pillar 2 are many important technical questions necessary to implement the Framework, such as with respect to determining tax base.
Broadly unaddressed by the Framework are concerns raised regarding the participation and benefit of the process afforded to developing nations. In September, the G-24, voiced their extreme frustration with the process and July framework, demanding among other items: a higher allocable amount of profits to market jurisdictions under Pillar 1; a higher global minimum corporate tax rate than 15% under Pillar 2; clearer and broader source-taxing rights under the Pillar 2 STTR, which remain largely unaddressed by the Framework (and which would otherwise primarily benefit MNE headquarter countries, including G-7 members such as the United States); and flexibility in immediately abandoning local digital service taxes that the OECD is seeking to bar as part of the Framework. A lack of transparency around the process has also been raised as a concern for the many nations impacted by the agreement that are not necessarily afforded the same level of participation as G-7 and G-20 nations. Key G-24 members Nigeria and Kenya have not yet joined the Framework.
Concerned civil society organizations have encouraged developing nations to consider abandoning the deal and the process, or at minimum, to seek greater electability into or out of the Framework and assurances that efforts to improve transparency around the process and its overall revenue benefits will continue.
"We are grateful for President Biden's and Treasury Secretary Yellen's leadership in advancing these negotiations but support the equity and sustainability concerns raised by the G-24," said Gary. "Given the collective challenges driving this international agreement, it is essential that the Framework be equitable and politically viable over the long-term." The OECD has previously indicated that it is targeting the end of October 2021 to formally finalize this Framework. To achieve this ambitious goal, G20 Finance Ministers are scheduled to meet October 12 and 13 to continue to advance the Framework in anticipation of the meeting of G20 heads of state scheduled for October 30-31 in Venice, Italy. Then, governments will go about with the potentially politically challenging (and varied) acts necessary to implement any final Framework by 2023, other than with respect to the UTPR under Pillar 2, which would generally be implemented in 2024.
The Financial Accountability and Corporate Transparency (FACT) Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.
(202) 827-6401LATEST NEWS
Israeli Airstrike Kills Houthi Prime Minister in Yemen's Capital
As one Houthi leader pledged that "we shall take vengeance," Israel's defense minister said that "this is just the beginning."
Aug 30, 2025
Yemen's Houthis confirmed Saturday that an Israeli airstrike Thursday in the country's capital, Sanaa, killed "several" government officials, including Prime Minister Ahmed al-Rahawi.
The Houthis, also known as Ansar Allah, have targeted Israel and ships in the Red Sea over the US-backed Israeli assault on the Gaza Strip, which has been increasingly denounced as genocide. Israel and the United States—under both the Biden and Trump administrations—have responded to the Houthis' Red Sea actions by bombing Yemen, where an ongoing civil war began in 2014.
As The Associated Press reported Saturday:
Thursday's Israeli strike took place as the rebel-owned television station was broadcasting a speech by Abdul Malik al-Houthi, the secretive leader of the rebel group in which he was sharing updates on the latest Gaza developments and vowing retaliation against Israel. Senior Houthi officials used to gather to watch al-Houthi's prerecorded speeches.
Al-Rahawi wasn't part of the inner circle around Abdul Malik al-Houthi that runs the military and strategic affairs of the group. His government, like the previous ones, was tasked with running the day-to-day civilian affairs in Sanaa and other Houthi-held areas.
Although the full list of Houthi officials killed in the strike has not been released, Reuters reported that unnamed sources confirmed that "the energy, foreign, and information ministers were among those killed."
The news agency also noted that while Al-Rahawi became prime minister around a year ago, "the de facto leader of the government was his deputy, Mohamed Moftah, who was assigned on Saturday to carry out the prime minister's duties."
In a Saturday statement, the Houthi government affirmed that it would continue to "fulfill its role" and "institutions will continue to provide their services to the steadfast, patient, struggling Yemeni people. It will not be affected, no matter the extent of the calamity... and the blood of the great martyrs will be fuel and motivation to continue on the same path."
"We affirm to our great Yemeni people, to the oppressed Palestinian people, to all the sons of our nation, and to all free people in the world, that we continue our authentic stance in supporting and aiding the people of Gaza, and in building our armed forces and developing their capabilities to face all challenges and dangers, just as our great Yemeni people are present in all fields and arenas with all determination, will, and faith," the government added, according to a translation from Drop Site News.
Both US President Donald Trump's administration and the government of Israeli Prime Minister Benjamin Netanyahu—a fugitive of the International Criminal Court for his country's conduct in Gaza—consider the Houthis a terrorist organization.
The Thursday strike came nearly a week after the Israel Defense Forces said that it intercepted multiple ballistic missiles launched by the Houthis, and at least one contained cluster munitions. Citing the IDF and Hebrew media, The Times of Israel reported Saturday that a missile fired by the Houthis overnight "fell short" of Israel, instead falling in Saudi Arabia.
The newspaper also shared Israeli Defense Minister Israel Katz's response to the Houthis confirming Al-Rahawi's assassination. He said that "two days ago, we dealt an unprecedented crushing blow to the senior officials in the military-political leadership of the Houthi terrorist organization in Yemen, in a bold and brilliant action by the IDF."
"The destiny of Yemen is the destiny of Tehran—and this is just the beginning," Katz continued. "The Houthis will learn the hard way that whoever threatens and harms Israel will be harmed sevenfold—and they will not determine when this ends."
Meanwhile, according to Al Jazeera, Mahdi al-Mashat, a Yemeni politician and military officer who serves as the chairman of the Supreme Political Council of the Houthis, said in a video message that "we shall take vengeance, and we shall forge from the depths of wounds a victory."
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'No More Conspiracy Theories. Kennedy Must Resign,' Says Sanders Amid CDC Fallout
Make America Healthy Again is "a great slogan," the senator wrote. "The problem is that since coming into office President Trump and Mr. Kennedy have done exactly the opposite."
Aug 30, 2025
"Robert F. Kennedy Jr., the secretary of health and human services, is endangering the health of the American people now and into the future. He must resign."
That's how US Senate Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Bernie Sanders (I-Vt.) began a New York Times op-ed on Saturday, amid mounting calls for Kennedy to leave the Department of Health and Human Services (HHS), by choice or force, following the ouster of Centers for Disease Control and Prevention (CDC) Director Susan Monarez.
As Sanders detailed in the Times—and a Thursday letter to Senate HELP Committee Chair Bill Cassidy (R-La.) demanding a congressional probe—Monarez was fired after reportedly refusing to "act as a rubber stamp for his dangerous policies." Her exit led to resignations and a staff walkout at the CDC, which is now being led by Jim O'Neill, a Kennedy aide and biotech investor.
Sanders and other lawmakers—including former Senate Majority Leader Mitch McConnell (R-Ky.), a polio survivor and the only Republican to vote against Kennedy's confirmation in February—have long warned about the consequences of letting RFK Jr. hold a key health policy position in President Donald Trump's second administration.
"Mr. Kennedy and the rest of the Trump administration tell us, over and over, that they want to Make America Healthy Again," Sanders noted Saturday. "That's a great slogan. I agree with it. The problem is that since coming into office President Trump and Mr. Kennedy have done exactly the opposite."
"Despite the overwhelming opposition of the medical community, Secretary Kennedy has continued his long-standing crusade against vaccines and his advocacy of conspiracy theories that have been rejected repeatedly by scientific experts," the senator wrote. "It is absurd to have to say this in 2025, but vaccines are safe and effective. That, of course, is not just my view. Far more important, it is the overwhelming consensus of the medical and scientific communities."
Sanders pointed to guidance from the American Academy of Pediatrics, American Medical Association, and World Health Organization, and called out Kennedy's comments on autism, Covid-19 and polio vaccines, and immunizations in general.
"The reality is that Secretary Kennedy has profited from and built a career on sowing mistrust in vaccines. Now, as head of HHS, he is using his authority to launch a full-blown war on science, on public health, and on truth itself," he wrote, warning that in the "short term, it will be harder for Americans to get lifesaving vaccines," including for Covid.
However, "Covid is just the beginning. Mr. Kennedy's next target may be the childhood immunization schedule, the list of recommended vaccines that children receive to protect them from diseases like measles, chickenpox. and polio," the senator continued. He also sounded the alarm over the secretary "defunding the research that could help us prepare for the next pandemic."
Sanders, a leading advocate of Medicare for All, also took aim at the One Big Beautiful Bill Act that Trump signed last month.
"America's healthcare system is already dysfunctional and wildly expensive, and yet the Trump administration will be throwing an estimated 15 million people off their health insurance through a cut of over $1 trillion to Medicaid and the Affordable Care Act," he noted. "This cut is also expected to result in the closing of or the decline in services at hundreds of nursing homes, hospitals, and community health centers. As a result of cuts to the Affordable Care Act, health insurance costs will soar for millions of Americans. That is not Making America Healthy Again."
"Secretary Kennedy is putting Americans' lives in danger, and he must resign," Sanders concluded. "In his place, President Trump must listen to doctors and scientists and nominate a health secretary and a CDC director who will protect the health and well-being of the American people, not carry out dangerous policies based on conspiracy theories."
Bernie Sanders is right—RFK Jr. must resign. His leadership is an assault on science, public health, and truth. We’re not just talking politics; we’re talking lives. #ResignKennedy #ScienceFirst”www.nytimes.com/2025/08/30/o...
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— Elizabeth (@elizathewell.bsky.social) August 30, 2025 at 10:30 AM
Doctors, journalists, and others praised the senator's op-ed, with Trauma surgeon Mark Hoofnagle saying that "Bernie nails it."
Pennsylvania State University professor and A Desire Called America author Christian Haines wrote on the social media platform Bluesky that the piece was "clear and incisive, though I wish it didn't need to be said."
Also sharing the post on Bluesky, former Times labor reporter Steven Greenhouse said: "It's delusional for anyone to think that RFK Jr. and Donald Trump are making America healthy again. With Kennedy's war against science, truth, and vaccines and Trump's war against Medicaid, their movement should be called MAKING AMERICA UNHEALTHY AGAIN."
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Trump Bid to Block $4.9 Billion With 'Pocket Rescission' Blasted as 'Authoritarianism 101'
"Congress—and only Congress—passes budgets. Because the president's job is to take care the laws are faithfully executed, he must spend the money as directed," said Rep. Jamie Raskin, a constitutional scholar.
Aug 30, 2025
Democracy defenders and members of Congress are condemning US President Donald Trump's effort to use a "pocket rescission" process to block $4.9 billion in foreign aid as authoritarian and illegal.
The Office of Management and Budget (OMB) on Friday shared on social media Trump's letter to House Speaker Mike Johnson (R-La.) about the move. According to a White House fact sheet linked in a subsequent post, much of the money was headed for the US Department of State and the United States Agency for International Development (USAID), which Trump has gutted.
As The Associated Press explained:
The 1974 Impoundment Control Act gives the president the authority to propose canceling funds approved by Congress. Congress can within 45 days vote on pulling back the funds or sustaining them, but by proposing the rescission so close to September 30 the White House argues that the money won’t be spent and the funding lapses.
What was essentially the last pocket rescission occurred in 1977 by Democratic then-President Jimmy Carter, and the Trump administration argues it's a legally permissible tool despite some murkiness as Carter had initially proposed the clawback well ahead of the 45-day deadline.
Shortly after the OMB social media posts, Secretary of State Marco Rubio said that OMB Director Russ Vought was helping shutter USAID, writing on the platform X: "Since January, we've saved the taxpayers tens of billions of dollars. And with a small set of core programs moved over to the State Department, USAID is officially in closeout mode. Russ is now at the helm to oversee the closeout of an agency that long ago went off the rails. Congrats, Russ."
Meanwhile, Rubio's former congressional colleagues and others are sounding the alarm over the administration's effort.
"America is staring down next month's government funding deadline on September 30," said Senate Minority Leader Chuck Schumer (D-N.Y.). "It's clear neither Trump nor congressional Republicans have any plan to avoid a painful and entirely unnecessary shutdown. With Trump's illegal 'pocket rescission': They seem eager to inflict further pain on the American people, raising their healthcare costs, compromising essential services, and further damaging our national security."
Congressman Joaquin Castro (D-Texas) also put pressure on GOP lawmakers, saying that "this is wrong—and illegal. Not only is Trump gutting $5 billion in foreign aid that saves lives and advances America's interests, but he's doing so using an unlawful 'pocket recission' method that undermines Congress' power of the purse. I urge my Republican colleagues to say hell no."
While most Republicans on Capitol Hill have backed Trump's endeavors to claw back funding previously appropriated by Congress, GOP Sens. Susan Collins (Maine) and Lisa Murkowski (Alaska) voted against his $9 billion rescission package earlier this year.
Collins, chair of the Senate Appropriations Committee, also spoke out against Trump's new move, noting in a Friday statement that under the US Constitution, Congress has "the power of the purse," and the Government Accountability Office "has concluded that this type of rescission is unlawful and not permitted by the Impoundment Control Act."
Congressman Jamie Raskin (D-Md.), a constitutional scholar, similarly stressed that "Congress—and only Congress—passes budgets. Because the president's job is to take care the laws are faithfully executed, he must spend the money as directed. Trump's 'pocket recissions' are lawless and absurd. If a president opposes legislative spending decisions, he can veto them, subject to override, but once passed, he must execute on them."
Lisa Gilbert, co-president of the watchdog group Public Citizen, declared in a Friday statement that with the pocket rescission move, the Trump administration "demonstrated yet again its contempt for Congress' power of the purse and the Constitution's separation of powers."
"With this Constitution-mocking action, the administration is bringing us closer to a shutdown on September 30, and it doesn't seem to care," Gilbert said. "We call on Congress to push back, pass and abide by appropriations packages, and fight the administration’s illegal impoundments that harm regular Americans."
"This is not just a constitutional crisis, it's a matter of global justice," she added. "The congressionally appropriated funds that the Trump administration illegally aims to cancel support economic development programs to empower the world's most vulnerable and impoverished, and address some of the ravage of catastrophic climate change in developing nations."
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