WASHINGTON, DC – Today, Congress passed H.R.1, a budget reconciliation bill containing trillions of dollars of highly regressive tax cuts for wealthy individuals and corporations at the cost of steep cuts to healthcare, food assistance, and climate programs. In addition to its domestic corporate tax breaks, the bill also includes nearly $170 billion in international tax breaks benefiting the nation’s largest multinational companies.

“The international provisions of this bill, which have been marketed as ‘America-first’ reforms, actually put big corporations and tax havens first,” said Zorka Milin, policy director of the FACT Coalition. “Beyond tax breaks for the largest corporations, this bill makes deep tax discounts permanent for companies that move jobs and profits overseas. Congress is betraying promises made to American workers to bring back domestic jobs.”

The bill’s international tax provisions are estimated to increase the U.S. deficit by $167 billion over the coming decade. The entire bill, as passed, is projected to balloon the deficit by $3.4 trillion, before accounting for interest.

In addition to enormous cuts to healthcare and food assistance programs, H.R.1 guts numerous tax incentives for job-creating green energy projects, effectively surrendering the race against China to lead the global clean energy transition. In contrast, the bill includes nearly $18 billion in new and expanded tax breaks for U.S. oil and gas companies, including a new carveout that allows drillers to reduce or even entirely escape liability under a 2022 law designed to ensure that big corporations pay at least a minimum amount of tax on their income.

“Taken altogether, this bill moves nearly every aspect of the tax code in the wrong direction,” said Milin. “Instead of discouraging the offshoring of jobs, Congress gave the worst-offending corporations a tax cut. Instead of investing in America’s clean-energy future, it offers billions in new handouts to oil and gas. And instead of making the tax code fairer for working families and small businesses, it cuts vital assistance programs that communities rely on. This year, Congress had a major opportunity to implement real, commonsense tax reform. Instead, they chose to do the opposite.”

Notes to the Editor:

The full, final text of H.R.1 can be found here.
While H.R.1 repeals one overt incentive (the deemed tangible income return) for offshoring of tangible assets like factories, in line with FACT’s longstanding recommendations, various other changes to the tax treatment of multinationals’ foreign income amount to a large net tax cut relative to current law, and are likely to further deepen incentives for profit shifting.
A number of particularly damaging provisions advanced through various versions of H.R.1 were ultimately not included in the final bill. These include:
- A baseless, backward-looking exemption for certain income booked in the U.S. Virgin Islands that would have cost nearly $1 billion, and likely would have benefited only a single firm while doing nothing to stimulate investment in the territory.
- A retaliatory provision – the proposed Section 899, commonly called the “revenge tax” – which would have imposed harsh penalties on individuals and businesses domiciled in jurisdictions deemed to have implemented “discriminatory” or “extraterritorial” taxes. Section 899 was removed following the announcement by Treasury Secretary Scott Bessent and the G7 of a preliminary understanding that purports to exempt U.S. multinational corporations from certain taxes under the globally-agreed minimum tax regime, also known as “Pillar Two.”
- A broad exemption for certain payments otherwise covered under the Base Erosion Anti-Abuse Tax (BEAT) that would have cost tens of billions of dollars over the coming decade.

Last May, FACT released a policy platform outlining important international tax reform priorities to guide the 2025 tax debate. These priorities include equalizing the tax rates that corporations pay on foreign and domestic income, eliminating wasteful loopholes used by major multinationals to avoid taxes, and expanding funding for enforcement and technological modernization at the IRS.

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