US Senator Marco Rubio’s (R-FL) bicameral Patriotic Investment Act seeks to rewrite U.S. tax code to remove rewards for investments in China.
Senator Rubio’s bill would remove capital gains tax rate breaks from investments made in entities associated with the Chinese Communist Party (CCP).
The bill does not apply to companies without direct links to the Chinese government or the CCP.
Rubio claimed such tax breaks were intended to stimulate the American economy but are instead being used to finance Chinese firms counteracting US interests.
“The Capital gains tax rate was meant to encourage investment in American innovation, not fund an oppressive communist regime, but Wall Street continues to give money to our adversaries and reap rewards from the American tax system,” said Rubio.
If Rubio’s bill passes, investments in CCP-linked entities would be taxed at the highest income bracket.
Companies with current investments in China would be given six months to divest from their Chinese holdings.
Previous gains would not be taxed retroactively.
““Enough is enough,” continued Rubio. “My Patriotic Investment Act will level the playing field and ensure that our tax code no longer encourages investments that undercut American businesses and workers.”
Rubio has led the US’ economic confrontation with China, sponsoring various sanctions packages in recent weeks and months.
Most recently, Rubio proposed imposing economic sanctions to counteract China’s role in the illegal fentanyl trade.
Another earlier Rubio sanctions proposal sought to sanction Chinese entities using slave labor to manufacture goods.
China has been repeatedly criticized for producing cheap goods on the backs of unpaid muslim minorities in the Xinjiang Uyghur Autonomous Region (XUAR).
The CCP has previously stated allegations of forced labor are “an enormous lie propagated by anti-China elements to smear China.”
American lawmakers, however, point to myriad reports substantiating claims of slave labor use in the XUAR.
Evidence from sources such as the Congressional-Executive Commission on China is cited as revealing “authorities in the XUAR maintained a system of forced labor that involved former mass internment camp detainees.”
