Fall Newsletter

Fall Newsletter
October 4, 2023

  • Maintaining the competitiveness of our tax system will spur economic growth and create jobs.
  • Pillar Two international tax rules from the OECD favor foreign tax regimes and ignore a key aspect of the U.S. tax system—tax credits that incentivize clean energy and research and development. As a result, American businesses would have to unfairly pay taxes to foreign countries to meet the minimum tax percentage required under the OECD.
  • The U.S. Research and Development (R&D) tax credit helps maintain U.S. leadership in innovative and cutting-edge technologies and the jobs that these development activities provide.
Government Funding and Tax

The passage of a short-term government funding bill, combined with the recent turmoil in the House, decrease the likelihood of anything other than must-pass legislation and full-year funding being the central issues in Washington this fall. In addition to paying close attention to these developments, GM is also concerned with two tax issues that could have an outsized impact on the company and our future success: the Organization for Economic Cooperation and Development’s (OECD) new tax rules and the extension of the U.S. R&D tax credit.

The OECD—a global intergovernmental organization of 38 countries committed to high international standards for economic policies—has enacted new tax rules that unfairly favor foreign tax practices. The new OECD Pillar Two minimum tax rules seek to impose a 15% minimum tax on the profits of large global companies. If a company’s effective tax rate in any country is below 15%, other countries can impose an additional tax on that company.

However, the OECD rules apply a different standard to how that percentage is calculated, treating refundable tax credits and cash incentives, such as those offered in other countries, differently. A justifiable effort, the OECD does not consider that tax rates at U.S. companies may fall below the 15% minimum tax rate because non-refundable incentives such as U.S. R&D and clean energy tax credits often lower a company’s effective tax rate.

This means American businesses would unfairly pay taxes to foreign countries as a consequence of their innovation, whereas the EU and other countries would not. For GM, that means the company and our vehicles could miss out on the full benefit of commercial EV tax credits in addition to paying increased taxes to foreign countries like Mexico, Canada, South Korea, and even China.

Congress and the administration should advocate for non-refundable tax credits to be treated the same as refundable credits in the OECD tax rate calculation to avoid undermining U.S. investment incentives and placing U.S. companies at a disadvantage. 

Additionally, the U.S. R&D tax credit helps maintain U.S. leadership in innovative and cutting-edge technologies and the jobs that these development activities provide. However, recent rules under the 2017 tax reform law prevent companies from deducting these necessary expenditures. Repealing this provision would encourage investment in the cutting-edge research required to develop clean energy solutions.

Congress should maintain the R&D tax credit and deduction expensing to keep our tax system competitive with other developed countries, many of which provide a similar incentive.

As the government funding debate gets settled, these types of modifications could be wrapped into a comprehensive funding package toward the end of the year. This package could include a host of largely bipartisan tax riders or others demanded by House Republicans and may potentially address the R&D tax credit.


Fall Newsletter
October 4, 2023

  • Trade benefits the U.S. economy and improves national security for the U.S. and its allies.
  • U.S. policymakers should support trade agreements that are mutually beneficial, enforceable, and commercially meaningful while encouraging allies to align with existing U.S. trade policies.
  • Congress and the Biden administration should seek more transparency, stability, and predictability in U.S. China policy, including pursuing practical outcomes with China that safeguard low-risk business activities.
China & Trade

As tensions flare between the U.S. and China, and China’s global economic status continues to rise, Congress and the administration have looked to choke off what they perceive as potentially dangerous Chinese inbound and outbound investment.

With increased Congressional calls to pass anti-China policies, including potentially revoking free trade with China by withdrawing Chinese permanent normal trade relations (PNTR) status, Chinese market access for American businesses, including GM, is at risk. Simply put, American businesses would not be able to sell American goods to Chinese consumers. This would almost certainly threaten hundreds of thousands of jobs across the country and risk prompting a recession in the midst of an already vulnerable economy.

Congress should work toward improved U.S.-China relations, understanding the importance of trade to the U.S. economy. Trade not only benefits the U.S. economy and supports national security objectives, but it also offers allies an alternative to China’s economic diplomacy and coercive economic tactics. In protecting domestic industry, Congress and the administration can focus on non-tariff trade barriers, which create equally, if not more binding, restrictions on trade than tariffs.

Separately, the administration needs to make more tangible progress inking trade deals that open foreign markets to U.S. exports or otherwise offer commercially meaningful outcomes. Policymakers should also encourage foreign governments to pursue trade and regulatory policies that reduce and/or remove barriers to the trade of green technologies and goods, allowing for the efficient adoption of products, such as zero-emission vehicles and services that will reduce carbon emissions and help ambitious companies reach net zero goals.


Fall Newsletter
October 4, 2023

  • Association memberships and partnerships help provide a unified industry voice, tackle controversial issues, and leverage the groups’ collective strength to effectively influence federal and state policy.
  • GM will continue to actively seek out and cultivate these relationships to help effectively advocate for and advance our priorities and values.
State Partnerships and Advocacy

Driving progress through partnerships.

Cheers to 75 years! If you didn’t already know, GM has been an active member of the New York Business Council—the leading business organization in NYS—for 75 years. In fact, GM recently received an award for the anniversary at the group’s annual meeting in the presence of Governor Kathy Hochul (D-NY) and several other state lawmakers.

What does this relationship represent? GM’s membership in the NY Business Council is just one example of the way we’re engaging and partnering with organizations and others across the country in our daily advocacy. These partnerships and memberships remain crucial to staying above the noise, building relationships, and effectively engaging policymakers about the issues important to the company, our employees, and other key stakeholders.

The benefits of trade associations and partnerships: Associations help their members in three ways: they present a unified voice, take hits on controversial issues, and deliver strength in numbers on topics that affect entire industries. Associations can also pull in policymakers who might not otherwise engage on issues by building coalitions with other stakeholders to amplify a message larger than a single industry could. According to one of our partners, Penta Group—which studies federal and state policymakers—policymakers greatly value these associations as part of their decision-making process:

“They speak on behalf of an industry. It’s a very good symbolic relationship instead of having one [company] talk on behalf of what’s important to them. For…somebody who is a staffer and a policymaker, it was a lot easier to take the word from the association because I know that the buy-in went through…different companies.”  – Former Federal Agency Senior Advisor

GM’s relationship with the Business Council helped fend off recent legislation that would have unjustifiably increased GM’s costs in the state and placed our WNY facilities at a disadvantage. GM will continue to actively seek out and engage in similar associations and partnerships that help us more effectively advocate for and advance our priorities and values.