The prospects for a third Republican-only budget reconciliation bill (3.0) this year is still garnering attention. Congressional Republicans see another budget bill possibly addressing affordability and compliance and integrity provisions for federal social safety net programs, with President Trump eyeing defense funding. Tax measures could also be included.

The onus for moving forward on a third reconciliation bill is widely seen as falling on House Speaker Mike Johnson (R-LA), who confirmed his intention to include a voter ID measure in a GOP-only bill as the only path forward. In a 23 June interview, House Ways & Means Committee Chairman Jason Smith (R-MO) said he supported a third reconciliation bill but noted "we only have 30 legislative days between now and the [November] election."

US and OECD officials, at a Washington, DC conference this week, offered various insights regarding digital taxation as well as Pillar Two.

Rebecca Burch, US Treasury deputy assistant secretary for international tax affairs, repeated earlier statements that any discussion on taxing the digital economy must first consider underlying assumptions and basic principles. She was quoted as saying that the Inclusive Framework must first consider the evidence before determining whether existing tax rules are inadequate and pushed back on the argument that broader taxing rights are the answer.

On the same topic, an OECD official explained his belief that negotiators should first focus on analyzing new business models vis-à-vis the existing international tax system. The next step, he said, would be to review the challenges to the international system to determine if they are real and update the rules, if necessary.

On the question of artificial intelligence (AI) in the digital taxation sphere, Burch was quoted as saying that, although it might be tempting to include AI in the policy discussion, it would be a mistake to do so at this time because it would bog down the dialogue on current issues.

In regard to Pillar Two, in July the OECD will release an updated economic impact statement on the global minimum tax. Speaking at the same conference, Manal Corwin, director of the OECD's Centre for Tax Policy and Administration (CTPA) was quoted as saying the report will show that the global minimum tax will reduce profit-shifting incentives and increase corporate effective tax rates (ETRs).

The OECD CTPA director said the economic impact report will indicate that the global minimum tax reduces the prevalence of low ETRs for in-scope multinationals and improves the "allocation of capital globally."

Another OECD official at the conference said the organization is aware that some countries' bilateral investment treaties contain provisions that could create issues in implementing qualified domestic minimum top-up taxes (QDMTTs). The official was quoted as saying the Inclusive Framework is considering how to find a coordinated solution for jurisdictions with affected treaties and that want to implement QDMTTs.

And in a discussion on public country-by-country reporting (CbCR), the OECD's Corwin noted that the Inclusive Framework opposed public release of CbCR due to potential misuse of the information and possible release of private commercial data. She said: "The public doesn't have the tools or the context to be able to make those interpretations that even tax administrations can't do just by looking at the reports."