"Obscure" Proposed Tax Measure Gives Wall Street, International Investors The Jitters – Report

Editorial Staff

30 May 2025

An “obscure” tax measure contained within President Donald Trump’s tax and spending bill going through Congress is rattling Wall Street, Bloomberg reported.

The item – introduced in legislation that was passed in the House last week as Section 899 and titled “Enforcement of Remedies Against Unfair Foreign Taxes” – calls for, among other things, increasing tax rates for individuals and companies from countries whose tax policies the US deems “discriminatory,” the article said. This includes raising tax rates on passive income, such as interest and dividends, earned by investors who are potentially sitting on trillions in the US.

The measure, if it becomes law, would further alienate foreign investors, the report said.

The report quoted Michael Brown, a strategist at Pepperstone Group, a brokerage firm founded in Melbourne whose clients are all outside the US, as saying: “We’re already dealing with a market where Treasuries, to foreign investors, probably aren’t the most attractive investment. If you’re now talking about massively unfavorable tax treatment, then it’s just another reason to stay away.”

The report said that among those potentially affected are institutional investors including sovereign wealth funds, pension funds and even government entities, as well as retail investors and businesses with US assets.