By SEN. RAND PAUL Posted 05/16/2013 06:14 PM ET
Earlier this week, I introduced a bill that would reform the Foreign Account Tax Compliance Act (Fatca).
Originally tacked on as the “pay-for” to a 2010 bill to incentivize hiring, Fatca was intended to crack down on overseas tax evasion.
That’s not been the reality, however.
Instead, the Treasury Department has chosen to manipulate Fatca to establish an international financial snooping scheme that violates the Constitution, disregards the mutual respect of sovereignty among nations, increases the national debt, and threatens America’s economic competitiveness.
Fatca, with little fanfare, made sweeping changes to privacy laws.
It required every non-American financial institution — banks, credit unions, pension funds, stock and investment firms, etc. — to register directly with the U.S. Internal Revenue Service (IRS) and agree to provide specified financial data on the accounts of any “U.S. Person.”
What came next was all too predictable: rather than expose themselves to Fatca’s new withholding penalties, these overseas financial institutions simply began shutting down the accounts of their American depositors and selling off American investments.