Senator Paul stirs business ire over blocking of U.S. tax treaties
I had this in a comment to the FATCA thread but think more will see it as a post:
WASHINGTON, April 28 (Reuters) – Senator Rand Paul is coming under pressure from some multi-national businesses to drop his opposition to tax treaties between the United States and other nations.
Citing privacy concerns about Americans’ tax data, Paul, a Republican and libertarian, has single-handedly blocked Senate action on treaties with Hungary, Switzerland and Luxembourg that have been signed by authorities on both sides, but have been awaiting Senate review since 2011.
kudos Patrick Henry. Gotta sleep myself, now, wished I did the same.
Its not too late to write to him. He’s one of the best friends ex-pats got.
@Patrick Henry,
I agree it is important to email Senator Rand Paul to let him know how much we appreciate his support!
For those who want to send and email to Senator Rand Paul to show support for his opposition against FATTCA, here is the link to his website: http://www.paul.senate.gov/?p=contact.
Anyone worried about keeping anonymous, can put a fake name or address in the contact information.
Also, the state drop down does not have provinces, but requires a selection, so just select any state.
If you want to clarify that you are a US person abroad, you can free format whatever address you like in the street section.
Birds of a feather:
From Global Financial Integrity, an award which Tax Justice Network applauds:
Global Financial Integrity Honors Senator Carl Levin (D-MI) with 2011 Annual Award for Exemplary Leadership
http://taxjustice.blogspot.ca/2011/12/global-financial-integrity-honours-us.html
Carl Levin is the father of FATCA and in bed with Tax Justice Network and Global Financial Institute (proponents of GATCA). Rand Paul is beginning to take the lead of the Anti-FATCA camp which includes the CATO Institute and Center for Freedom and Prosperity.
Rand deserves as much support as possible. He has consistently been on the right side of issues affecting ex-pats.
“US senator, lobby group in tax info disclosure pushback”
http://www.international-adviser.com/news/tax—regulation/us-senator-lobby-group-in-tax-info-disclosure
Promises to be an epic battle.
I had written a brief note to Sen. Paul the other day after the suggestion from Jim Jatras. I just received a reply. I won’t post the whole thing. I’m sure it’s just a semi-automatic response to keywords in my email and half of it is a preamble which covers ground we all already know but I did find the the below of interest even though it doesn’t really say anything.
“I have long been a critic of government intrusion into the privacy rights of Americans. As a lead opponent of the May 2011 extension of the USA PATRIOT Act, which allows the federal government to engage in warrantless searches, I believe the right to privacy is critical to the preservation of other rights. We have to be very careful not to continue down the slippery slope that our current and previous Administrations has taken us.
Rest assured I am fully aware of the effect FATCA is having on Americans overseas and will continue to keep a close watch on this issue. As I represent the Commonwealth of Kentucky in the United States Senate, I will remain committed to defending the proper role of the federal government, as outlined by the Constitution, and defending the rights of all Americans citizens.”
Kudos to Sen. Paul’s staffers for responding. I wrote 8 MEPs for London about FATCA several weeks ago with messages tailored to each of their relevant committee memberships and didn’t hear a peep.
“FATCA Treaties Held Up in US Senate”
http://blogs.wsj.com/riskandcompliance/2013/05/01/fatca-treaties-held-up-in-us-senate/
“The U.S. Senate is unable to ratify three Foreign Tax Account Compliance Act treaties because of a hold by Sen. Rand Paul (R-Kent.), and if the delays continue much longer they could complicate implementation of the law, which is due to take effect in January.”
The article is not exactly accurate, but Paul is proving to be an obstacle for the FATCAnatics’ agenda.
As much as I appreciate Sen. Paul holding his finger in the dike I wonder how long he can do this. I’m also puzzled by Treaty vs. IGA. I didn’t think the FATCA IGAs were being treated as actual treaties by the USA, so I wonder why they would even be on the Senate table. Is an intergovernmental agreement the same as an international agreement? Is an international agreement an executive agreement but an intergovernmental agreement something else? If so, what exactly? This is rather confusing.
http://www.senate.gov/artandhistory/history/common/briefing/Treaties.htm
“When a treaty is submitted to the Senate for approval, the Senate has several options for action. The Senate may approve or reject the treaty as it has been submitted or it may make its approval conditional by including in the resolution amendments to the text of the treaty—reservations, understandings, interpretations, declarations, or other statements. The president and the other countries involved must then decide whether to accept the conditions and changes in the legislation, renegotiate the provisions, or abandon the treaty. Finally, the Senate may choose to take no definitive action, leaving the treaty pending in the Senate until withdrawn at the request of the president or, occasionally, at the initiative of the Senate.”
“In addition to treaties, which may not enter into force and become binding on the United States without the advice and consent of the Senate, there are other types of international agreements concluded by the executive branch and not submitted to the Senate. These are classified in the United States as executive agreements, not as treaties, a distinction that has only domestic significance. International law regards each mode of international agreement as binding, whatever its designation under domestic law.”
@Tim
What a brilliant article that GFI attack on Rand Paul is. You have to appreciate how its clever and devious its word smithing is. The average person will read right by the reality of what is being blocked and why. In a very narrow sense, you could say this headline is technically correct…
GFI Calls on U.S. Sen. Rand Paul to Drop Holds on FATCA Implementation Treaties
Funny way to define a Treaty as an ‘implementing’ document for a FATCA agreement, but in many ways that is what it is.
He is blocking implementing treaties, so to speak, as they need the actual TAX Treaty(what he is really blocking) to be able to implement the FATCA IGA model 1 agreement. Just deliberately deceptive headline and emphasis.
Notice later they call FATCA, correctly, as “FATCA agreements” however most people reading the article who don’t understand what is happening will be left with a mis-impressionism. Also, these guys obviously want DATCA reciprocity of the IGA, as this statement shows.
My read is that the financial industry and companies effected by FATCA want the IGA as an alternative to the entire FATCA 544 page rule book they are faced with complying with. They are really fearful of the 30% withholding, so I can see why they are going after Rand Paul. His blocking of the actual Treaties is forcing them to make a harder business decision related to FATCA compliance.
At least with an IGA they think their problems of compliance are lessened, and frankly with all the other financial institutions under a countries IGA in the same boat there is no competitive advantage or disadvantage to any company that decides not to be compliant. A decision they could make, but don’t want to make, if they only had the FATCA regulation to consider.
Additionally, the IGA strengthens the TBTF institutions as they can afford the IT cost of implementation at the expense of the smaller ones which are facing regulatory overload. It is crony capitalism at its best, using government regulations to subvert your competition and attacking those (like Rand Paul) that would make them make hard business decisions about compliance. At least that is my take.
Now, Roger asks the inevitable question:
Exactly…. but as we know, implementation of FATCA via the IGA was an after thought never conceived of when the Hiring Act was approved in 2010.
The IGA is the only way Treasury thought they had a practical chance of implementing FATCA as written by Congress. That was to force these unilateral cram downs (with vague reciprocity promises) onto recalcitrant governments who do have Tax Treaties, and market them as simplification. This is encouraging other countries to sign TAX Treaties (now blocked by Rand Paul) to get a more favored nation status that a Tax Treaty allows.
That said, I think the FATCAnatics must be pleased how the rest of the OECD has come to love FATCA as a model for their ‘Sons of FATCA” and as a means of starting a movement towards aglobal GATCA of automatic data exchanges. As a result of this global treand, we may never be able to get the genie back in the bottle, except by killing DATCA reciprocity in the USA. If the Dems get into power in the House in 2014, GAME OVER!
Covered by Accounting Today:
http://www.accountingtoday.com/news/Rand-Paul-Blamed-Blocking-FATCA-66580-1.html
Rand Paul is literally in the center of the FATCA shit storm.
By placing an obstacle in the way of the implementation of FATCA, he will be blocking both DATCA and GATCA.
Ron Paul’s supporters are hard core lovers of freedom and privacy. Rand’s slightly more hawkish views on foreign policy has cost him some of his father’s base. If he rolls over on FATCA, he will probably lose most of the rest. Without his father’s base, he will pretty much become just another senator from Kentucky.
My guess is that he will hold out as long as he can. But we’ll see…
Pingback: The Isaac Brock Society
A quick tweet…
No, There Are No #FATCA Treaties in the Senate via @CFandP http://bit.ly/ZDP6AZ @GFI_Tweets Stop attacking @SenRandPaul #StandwithRand
http://freedomandprosperity.org/2013/blog/no-there-are-no-fatca-treaties-in-the-senate/
I guess Ran Paul followers don’t even understand the issue, so just confound the problem by repeating what the WSJ and GFI headlines, go figure…
http://randin2016.org/fatca-treaties-held-up-in-us-senate/?utm_source=twitterfeed&utm_medium=twitter
@just me
I guess when you can support the proliferation of guns you can get behind anything, even if that anything has the appearance of something terrible even to you.
A more accurate Article here, from The Hill (hat tip to Tim. I am just up this morning and reading and he has already found it. 🙂
http://bit.ly/12GVu7Q
Mitchell, a senior fellow at Cato, a libertarian think tank, said he shared Paul’s concerns about the tax treaties, and also called FATCA “very destructive.”
But Mitchell added that Paul’s efforts could be for naught, at least when it comes to FATCA. “Rand Paul could hold up treaties from now until eternity, but that may not do anything about FATCA,” he said.
Read more: http://thehill.com/blogs/on-the-money/international-taxes/297741-libertarian-lawmaker-blocks-international-tax-treaties#ixzz2SSfj95kj
RT @taxpolblog Correcting the record 5 ways on the stories about Sen. Paul blocking “FATCA Treaties” http://bit.ly/15m8iY1 @GFI_Tweets
duping a comment from another thread on the so called Tax Treaty fight…
Rand Paul Not Backing Down on Tax Treaty Fight
Business groups and liberals are joining forces to fight back against Sen. Rand Paul’s continuing block of international tax treaties, saying his unwillingness to budge is harming business interests.
I put up a comment which is in moderation, but you all will enjoy Nathan Hales comment…
Nathan Hale’s comment was spot on, especially these parts:
“Senator Paul is doing all of us a service that most Americans don’t realize….”
“FATCA will NOT raise the revenue it says it will; it will NOT do what it claims it will do; and in the meantime, overseas Americans are losing jobs, losing markets, and losing their citizenship as a choice of being able to simply live a normal life.”
I received this email in response to an email I sent Rand Paul:
May 6, 2013
Dear Mrs. XXXXX,,
Thank you for taking the time to contact me regarding the Foreign Account Tax Compliance Act (FATCA). I appreciate hearing your thoughts on this issue.
During the 111th Congress, Congress passed and President Obama signed into law, the Hiring Incentives to Restore Employment (HIRE) Act of 2010 (P.L. 111-147). This legislation drastically expanded government involvement in the financial goings-on of Americans who live and work abroad. FATCA, the tax evasion provision in this bill, requires all foreign financial institutions (FFI) to provide a detailed report on American account holders to the Internal Revenue Service (IRS) beginning in 2013, or be subjected to a 30 percent withholding tax on income from U.S. assets. American account holders with more than $50,000 who fail to file a report with the IRS would also be subject to a 30 percent withholding tax. As a newly elected member of the 112th Congress, I did not participate in the debate of this law and would have voted against it if I had been.
Not only does FATCA allow the government to obtain a wide array of international banking records without evidence of such tax evasion, but the outrageous cost of compliance with this requirement has been estimated at $30 million per FFI. Rather than comply, many banks have refused to serve American clients and have begun shutting down their accounts. I have serious concerns with FATCA and that is why, along with my Republican colleagues, Senators Saxby Chambliss (Ga.), Jim DeMint (S.C.) and Mike Lee (Utah), I wrote a letter to Treasury Secretary Tim Geithner questioning the implementation of this onerous mandate.
I have long been a critic of government intrusion into the privacy rights of Americans. As a lead opponent of the May 2011 extension of the USA PATRIOT Act, which allows the federal government to engage in warrantless searches, I believe the right to privacy is critical to the preservation of other rights. We have to be very careful not to continue down the slippery slope that our current and previous Administrations has taken us.
Rest assured I am fully aware of the effect FATCA is having on Americans overseas and will continue to keep a close watch on this issue. As I represent the Commonwealth of Kentucky in the United States Senate, I will remain committed to defending the proper role of the federal government, as outlined by the Constitution, and defending the rights of all Americans citizens.
Again, thank you for sharing your concerns with me. Please do not hesitate to contact my office in the future regarding federal issues.
Sincerely,
Rand Paul, MD
United States Senator
Rand Paul has it right. He deserves more letters of appreciation from ex-pats for his unwavering stance against FATCA.
“I have long been a critic of government intrusion into the privacy rights of Americans. As a lead opponent of the May 2011 extension of the USA PATRIOT Act, which allows the federal government to engage in warrantless searches, I believe the right to privacy is critical to the preservation of other rights.”
“Rest assured I am fully aware of the effect FATCA is having on Americans overseas and will continue to keep a close watch on this issue….. I will remain committed to defending the proper role of the federal government, as outlined by the Constitution, and defending the rights of all Americans citizens.”