Twenty of USA’s “largest and most influential free-market, taxpayer protection and grassroots organizations, sent a letter to Senate members urging support for legislation introduced by Sen. Rand Paul to repeal the majority of the Foreign Account Tax Compliance Act (FATCA). The bill, S. 887, would repeal FATCA’s most costly and privacy-violating provisions.”
The Coalition for Tax Competition letter explains: “FATCA imposes on foreign financial institutions the obligation to provide financial information on the accounts of U.S. citizens without the need for evidence of tax evasion or other crimes. Institutions that fail to comply with costly reporting requirements are subject to a draconian 30% withholding of U.S.-derived income. In addition to the unjustified and unconstitutional invasion of the privacy of millions of Americans suspected of no wrongdoing, the practical consequences of the law include a growing refusal of many financial institutions to accept American clients or invest in the U.S. economy, the straining of relations between the U.S. and foreign nations whose fiscal sovereignty is being trampled, and an erosion of the separation of powers between the executive and legislative branches.”
The letter states the following reasons why Senator’s should sponsor S. 887 and repeal FATCA: 1) FATCA will not achieve its stated goal of significantly reducing tax evasion. 2) Unilateral and extralegal imposition of requirements on foreign institutions is straining relations with other nations. 3) Americans living and working overseas are being dropped by financial institutions seeking to avoid FATCA penalties, and face excessive penalties for minor mistakes. 4) The US economy will suffer a loss of foreign investment, resulting in fewer jobs and economic opportunities. 5) Promises by Treasury Department officials to provide reciprocal information sharing will add costly burdens on domestic institutions and their customers. Moreover, the intergovernmental agreement process they are using is not authorized by the law and represents a troubling end run around the Senate’s treaty review authority.
We haven’t derailed the FATCA train yet, but it sure helps having having these heavy hitting players on board!