American exceptionalism, the product of economic freedom and the source of our prosperity is being threatened by the Biden administration, which seeks to circumvent Congress, the courts, and the Constitution to Europeanize the American economy.
The administration, which can’t get Congress to legislate its agenda or the courts to allow it through executive orders, is now using international agreements and coordination in tax, antitrust, environmental, and financial policy to empower Europe to impose the administration’s agenda on the U.S. [emphasis, links added]
Europe is more than willing to share its constraints with its more efficient competitor, but the Biden administration is the driving force behind this regulatory race to the bottom.
This mounting regulatory burden is dragging down the unique productivity, wages, and profits that Americans view as our birthright.
A perfect example is the Biden administration’s agreement to allow foreign governments to tax U.S. companies on their U.S. earnings if Congress refuses to adopt the Organization for Economic Cooperation and Development’s (OECD) global minimum tax.
The administration not only supports the international tax increase but was its principal author. While 137 nations endorsed the OECD tax agreement, a Democratic Congress rejected it last year.
Now, with a Republican House, the administration’s only chance to raise corporate taxes is to use the OECD agreement to pressure Congress to impose the tax or let foreign nations collect the equivalent tax on U.S. subsidiaries operating in their countries.
The Trump administration blocked France’s proposed digital services tax on U.S. tech companies by threatening tariffs on its wine and cheese exports to the U.S.
But the Biden administration has pledged not to retaliate when foreign nations tax American companies on their U.S. earnings. …snip…
The Securities and Exchange Commission’s proposed climate-change standard, under which all large public and private companies would be forced to disclose their carbon footprint and those of their suppliers and customers, would impose European-style environmental reporting rules on American companies.
Lacking the clear legislative authority to issue such a rule, the SEC likely faces a Supreme Court challenge similar to West Virginia v. EPA (2022), which overturned President Obama’s Clean Power Plan.
But the SEC has a backup plan.
The European Union-dominated International Organization of Securities Commissions, of which the SEC is a member, has recently endorsed the International Sustainability Standards Board’s “sustainability-related financial disclosures standards.”
Will the administration coordinate with the EU to enforce its rules against U.S. companies operating in Europe and their American suppliers and customers?
While the SEC has used its regulatory power to impose the administration’s anticarbon initiative, it has also pushed to expand its jurisdiction to cover the $20 trillion private funds industry.
In August the SEC approved sweeping new rules to expand its regulatory authority over investments made by sophisticated investors that historically have been considered capable of protecting their own interests such as pension plans, university endowments, and wealthy individuals.
Based on his concern over the size and profitability of hedge funds, private equity, and venture-capital firms, SEC Chairman Gary Gensler has pushed his agency to adopt the largest expansion in its regulatory authority in 80 years on a 3-2 partisan commission vote.
Republican Commissioner Hester Peirce objected: “The rulemaking is ahistorical, unjustified, unlawful, impractical, confusing, and harmful.”
Given the absence of clear legislative authority for such a massive power grab, this is another invitation to a court challenge.
But large financial service providers have European investors, acquire European assets, and operate in Europe. Don’t be surprised if Mr. Gensler starts coordinating with European regulators.
The Biden administration’s Europeanization of the American economy is a political agenda meant to expand the size and power of government.
Most American families don’t have a political agenda. They have jobs, bills, and responsibilities; they want a better life for their children. …
Making America more like Europe gives the Biden administration the government it wants, but European economic results won’t give American families what they want.
Read full post at WSJ
Trackback from your site.