Patrick Boyle On Finance America’s Tax on Foreign Investors - Section 899
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Jun 16, 2025 A new tax proposal on foreign investors is stirring up discussions on Wall Street. Dubbed Section 899, it threatens to impose a hefty 20% tax on foreign entities if their home countries levy 'unfair' taxes against U.S. firms. Experts predict this could dampen foreign investment confidence and harm the U.S. economy. There's concern about potential retaliatory measures and the long-term effects on both productivity and wages. The implications for global trust in the American market are also debated.
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US Market Dominance via Tech
- The US equity market dominates with over 60% of global market capitalization.
- This dominance is fueled by mega cap tech companies like Apple, Microsoft, and Nvidia.
Section 899 Risks Capital War
- Section 899 could raise US taxes on foreign investors' income up to 50%.
- This risks making dollar assets less valuable, potentially triggering a capital war.
Tax Backfire on US Finances
- Section 899 could harm US government finances by scaring off foreign investors.
- Higher risk demands higher returns, increasing US debt financing costs and budget interest expenses.