{T} o protect their businesses from facing competition, the European Union and the Organization for Economic Co-operation and Development (OECD) have concocted an international tax cartel to weaken America’s most successful international businesses. The new tax rules discourage international investment by imposing tens of billions of dollars in compliance and economic costs.

When Congress cut the corporate-tax rate from 35 percent to 21 percent in 2017, it scared high-tax European welfare states. Now, they’re worried they can’t compete, so they’re forcing higher taxes on U.S. businesses, many of whom will start paying higher rates this year. The innocuously named OECD “inclusive framework” establishes an extraterritorial 15 percent minimum tax and a multilateral framework to redistribute taxing rights away from productive economies — like the U.S. — to consumer countries throughout the European Union.

Instead of endorsing the European plan, Congress should double down on America’s successful tax cuts by further cutting business rates and simplifying other tax rules. A low enough corporate-tax rate would break the OECD’s tax cartel, benefit domestic workers, and attract new businesses.

The OECD’s most punishing taxes begin after 2025, when Congress must address the expiration of the 2017 individual-tax cuts. The bet is that Congress will capitulate to the OECD’s global tax authority, adopt its rules, and institutionalize a business-tax system run by bureaucrats in Paris.

Democrats want to adopt the OECD’s tax system and go even further. President Biden would raise the corporate-tax rate to a high 28 percent and increase the minimum tax U.S. companies have to pay on their activity in other countries to 21 percent — 40 percent higher than the European proposal. Biden’s tax hikes would return us to the pre-2017 era, when more than 60 firms moved their headquarters overseas to escape high U.S. taxes.

Republicans have raised concerns about the OECD plan and proposed retaliatory measures in response to the OECD taxes. But, as is too often the case, they are being too timid. Bolder reforms are needed.

The lesson learned in 2017 is that Europe gets scared when America supports its businesses with pro-growth policies. Following the tax cut, multinational corporations returned more than a trillion dollars to U.S. shores, and profit-shifting to low-tax countries plummeted to a ten-year low. A recent study found that the tax cut caused affected firms to increase domestic investment by 20 percent. That massive investment increase is creating new jobs and raising wages for American workers.

Congress should double down on the success of the 2017 tax cuts, not roll it back. There’s plenty of proof that such policies are beneficial. Ireland has shown that business-friendly tax rules and a low corporate-tax rate can bolster the economy and boost revenue. Ireland cut its corporate tax and revenues rose by more than 70 percent.

It’s widely acknowledged that the corporate-income tax is one of the most economically destructive ways for governments to attempt raising revenue. Simply repealing the tax entirely would provide the biggest economic benefits. But lowering the U.S. corporate-tax rate to 12 percent is a sufficient compromise to undercut Ireland’s 12.5 percent rate, the lowest in the EU, and thereby encourage more business here. 

Supporters of the OECD plan will argue that the new world-order tax cartel is here to stay, so it’s time for the United States to get on board. They dubiously claim that United States will benefit from new tax revenue and ease business compliance burdens by cooperating with global partners.

Fortunately, the agreement is more fragile than they let on. Cartels are inherently unstable.

Instead of ceding tax sovereignty and encouraging businesses to conduct their activity elsewhere, Congress should increase the attractiveness of the United States as an investment destination and reject the OECD’s tax tyranny. America is already the world’s incubator for new companies. We should also be a preferred destination for their new employees, factories, intellectual property, and easy-to-move profits.