(English) Today’s Treasury Hearing on FATCA Conducted in Vain, Law Must Be Scrapped, Says CF&P President

Published by Center for Freedom and Prosperity (CF&P)

(Washington, D.C., Tuesday, May 15, 2012) In light of today’s Treasury Department hearing on the Foreign Account Tax Compliance Act (FATCA), the Center for Freedom and Prosperity (CF&P) is again taking the opportunity to call upon Congress to repeal the legislation. As the Treasury Department holds its public hearing today on the next major phase of implementing the draconian new financial reporting requirements, CF&P President Andrew Quinlan offered the following statement:

“Regulators have already pushed the FATCA deadline back once, and still many banks indicate they will be unable to comply in time. The law is unworkable, the requirements unnecessary, and the projected tax revenues much lower than the economic costs. Efforts by Treasury to implement the law without incurring significant economic damage are futile. It is incumbent upon Congress to take action, as only they can completely undo the mess which they created.”

Passed in 2010 as part of the Hiring Incentives to Restore Employment Act, FATCA threatens foreign financial centers with a 30% withholding requirement on US accounts if they don’t comply with draconian new reporting requirements. Citing the added hassle, many institutions have already begun dropping American clients and divesting in US assets, reducing much needed investment in the US economy. With fewer institutions willing to serve them, Americans living overseas are finding it difficult simply to open bank accounts, and are renouncing their US citizenship at a growing rate.

Many of the comments submitted during the comment period noted the excessive costs of implementing FATCA regulations, while also warning of disastrous consequences. The law has made US citizens a toxic liability, and provides a strong incentive for foreign financial institutions to disinvest in the US economy. FATCA’s fiscal imperialism is furthermore creating ill will toward the US.

CF&P has consistently warned of these and other dangers posed by FATCA. In previous letters CF&P has called upon Congress to repeal the law, and is reiterating that position today, while asking for Treasury to conduct a cost-benefit analysis, which would demonstrate the folly of passing, in the name of collecting taxes, laws that extract a higher cost from the economy than are expected to be collected in new revenues.