Dear Senator Tester,
While we may not have mountains on this side of the Continental Divide, eastern Montana is home to expansive plains and extensive history. Our area is also rich in natural resources, including an abundance of oil and gas provided by the Bakken Oil Field, which has provided us with energy and millions in revenue for the past few yeas and the next generations to come.
Our economy has boomed since the discovery of the Bakken formation, which is the largest oil discovery in U.S. history. Eastern Montana’s stores, schools, and communities have grown and developed alongside the edges of the formation, leading to economic prosperity across the state. Now, even without the Bakken formation, eastern Montana’s communities continue to grow and prosper. But all of that could change should certain lawmakers have their way.
In a bid to help fund President Biden’s Build Back Better plan; some policymakers hope to raise corporate income taxes on American businesses. While the proponents of this legislative push might think that only large, wealthy corporations would pay these tax increases, they would in fact impact businesses of all sizes. Seeing as how many of our state’s small businesses are contending with pandemic-induced challenges like labor shortages and supply chain issues, a higher tax burden could spell the end for some of eastern Montana’s Main Street enterprises.
One tax increase under consideration would apply to the Global Intangible Low Tax Income (GILTI) rate, which applies a fee to the earnings made abroad by American companies. Currently, we are the only nation to apply such a fee to domestic businesses, and it already puts them at a competitive disadvantage. If we are to increase this fee, it would only add to the obstacles that many businesses face in utilizing supply chains and sourcing products from abroad. Given that many of eastern Montana’s businesses are involved in global supply chains, they would be unduly impacted by this tax hike.
Other countries are considering their own version of GILTI through a global minimum tax, which would go into effect in 2023, but it will not be until at least 2024 whether we know if this fee has actually been enacted, and on what scale. In the meantime, if we proactively raise GILTI before this other global tax plays out, we risk putting U.S. businesses at a further competitive disadvantage than they already are, allowing China and other rivals to take advantage.
I hope that you will say NO to tax increases like GILTI that would harm eastern Montana’s businesses and American competitiveness at large.
Sincerely,
Rick Norby
Mayor
City of Sidney
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