Earlier today, Senate Republicans unveiled the final and most contentious component of President Trump’s sweeping legislative package, the “Big, Beautiful Bill.” The Finance Committee’s long-awaited text - covering tax policy, Medicaid, and energy provisions - sets the stage for difficult negotiations between the Senate and the narrowly Republican-controlled House.
Perhaps of biggest interest to Wall Street is the treatment of the controversial Section 899 provision, i.e. "Revenge Tax" provision discussed extensively here. This morning, Goldman's chief political economist and DC liaison, Alec Phillips, published his long take (available to pro subscribers) on the Senate version of Sec 899, which foreign (and domestic) investors will be glad to know has been "softened and delayed."
As Phillips explains, the Senate’s version of tax legislation looks "broadly similar to the House-passed version in its near-term fiscal effects but would likely cost at a few hundred billion dollars more over the next decade (no formal cost estimates have been released). More to the point, new taxes under Sec. 899 would not be imposed until 2027, and would be capped at 15%, with clarification that interest payments (including to central banks) would not be taxed. The Senate could pass this legislation by late next week, though there is a chance this could slip to early July, and final enactment looks likely in July or early August.
