Center for Freedom and Prosperity
For Immediate Release
Wednesday, October 26, 2011
202-285-0244
www.freedomandprosperity.org
Congressional Hearing Highlights Destructive
Impact of Job-Killing IRS Regulation
(Washington, D.C., Wednesday, October 26, 2011) A Subcommittee of the House Financial Services Committee will hold a hearing Thursday on a proposed IRS regulation to require reporting of nonresident alien deposit interest information. Such interest is not taxed under US law, and requiring its reporting would drive away much needed foreign capital, while providing zero benefit to the US economy or American taxpayers.
The regulation (REG-146097-09) puts the interests of foreign tax collectors ahead of US economic interests. A 2004 study by the Mercatus Center at George Mason University looked at a similar regulation that only applied to fifteen countries and found that it would result in the loss of $88 billion in foreign investment. The current version of the proposed regulation, which would apply to deposits from citizens of any nation, would be even more destructive.
Center for Freedom and Prosperity President Andrew Quinlan commented, “Despite clear evidence of its costly impact – and overwhelming opposition from lawmakers, taxpayer protection organizations, and the financial industry – the IRS has never performed a cost-benefit analysis of the regulation as required by standing Executive Order.” He concluded, “This hearing provides an opportunity to hold the IRS to account for their flouting of clear Congressional intent to make the US an attractive destination for flight capital, as well as their disregard for legitimate regulatory process.”
The Center for Freedom and Prosperity has helped lead the opposition against all forms of the interest reporting regulation since it was first proposed in the waning days of the Clinton administration. Over the last decade, CF&P has testified at three IRS hearings on the issue, activated and issued letters from the Coalition for Tax Competition, produced a video highlighting the problems with the regulation, and undertaken an aggressive education campaign on Capitol Hill. In recent months, CF&P has met with over 100 House and Senate offices to brief them on the regulation and its job-killing impact on the US economy.
During the current Congress, Senator Marco Rubio (R-FL) and Congressman Bill Posey (R-FL) have introduced legislation to prevent the rule from being implemented. Sen. Rubio’s bill (S. 1506) has 17 cosponsors, and Rep. Posey’s (H.R. 2568) has six. Each has bipartisan support. Rep. Posey’s office has also previously lead the entire 25-member Florida House delegation into signing a letter in opposition to the regulation.
The hearing, entitled “Proposed Regulations to Require Reporting of Nonresident Alien Deposit Interest Income,” will be held Thursday, October 27th, at 9:30 AM in room 2128 of the Rayburn House Office Building.
For more information on the proposed regulation:
http://freedomandprosperity.org/issues/irs-information-sharing-regulation/
Link to CF&P video on the proposed regulation:
http://freedomandprosperity.org/2011/videos/the-irs-running-amok/
For additional comments:
Andrew Quinlan can be reached at 202-285-0244, andy@freedomandprosperity.org
Brian Garst, Director of Gov’t Affairs, bgarst@freedomandprosperity.org
###
