East Michigan News

Chairman John Moolenaar (R-MI) of the House Select Committee on the Chinese Communist Party and U.S. Senator Marco Rubio (R-FL) have introduced the Patriotic Investment Act, a bicameral bill aimed at preventing the U.S. tax code from rewarding investments in Communist China.

Wall Street financial firms often invest heavily in Communist China, directing hundreds of billions of dollars into enterprises that support China's military, utilize slave labor, and violate trade rules. These actions are seen as detrimental to American businesses and jobs, posing a threat to U.S. national security.

Despite these concerns, current U.S. tax regulations offer a low capital gains tax rate for such investments.

“For too long, Americans investing in China’s military-industrial complex have been given unfair tax breaks that allow them to profit from funding our adversary. That’s wrong and Senator Rubio and I are introducing this legislation to put a stop to this special treatment. Our nation’s tax code should be incentivizing investment in the United States, not collaboration with the CCP,” said Chairman Moolenaar.

“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. Enough is enough. 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,” said Senator Rubio.

The proposed bill seeks to discourage investments in Chinese securities by removing their preferential capital gains tax rate. Instead, these investments would be taxed at the highest income rate. This increased rate would apply only to future financial gains, not those already accrued. Companies and individuals would have six months after the passage of the Patriotic Investment Act to divest from Chinese securities and could spread their tax payments over three years.