Center for Freedom and Prosperity
For Immediate Release
Tuesday, May 8, 2012
CF&P Warns Conferees against Senator Levin’s Poison Pill Tax Amendment
(Washington, D.C., Tuesday, May 8, 2012) Center for Freedom and Prosperity President Andrew Quinlan sent a letter to Democrat and Republican members of the Surface Transportation Bill Conference Committee highlighting the dangers of allowing Senator Levin’s unrelated anti-tax haven amendment, slipped into the Senate version (S. 1813) by a voice vote, to make it out of conference and into the final bill. The conference meets for the first time later today to begin reconciling differences between the House and Senate versions. Should Levin’s amendment be included, it would drive investment out of the US and cost American jobs.
The letter (full text included below) warns:
The Levin-Conrad-Whitehouse amendment inserted provisions supposedly to “Stop Tax Haven Abuse,” but which would in reality further undermine global capital flows and weaken the American economy. The amendment expands authority granted under the Patriot Act in order to give the Treasury Department unchecked powers to extend U.S. tax law beyond American borders. Treasury officials would be required to spend resources tracking and analyzing all jurisdictions around the world, and the degree to which they bow to U.S. tax dictates. Treasury officials have no special expertise to make such evaluations, and history suggests any national tax blacklist would be arbitrary and discriminatory.
As the letter further sent to several dozen conference members explains, the new provisions come on top of the onerous burdens placed on foreign institutions by the Foreign Account Tax Compliance Act, which seeks to turn the entire world into deputy US tax collectors. FATCA regulations, which are still being promulgated by the Treasury Department, are already responsible for causing significant disinvestment in the US economy by foreign financial institutions that are unwilling to bear the heavy costs required to comply with the law. FATCA was similarly slipped into unrelated legislation by Senator Levin and passed without serious vetting by the appropriate Congressional committees.
“Senator Levin’s crusade against so-called tax havens is as irrational as it is dangerous,” said CF&P President Andrew Quinlan. “Despite constantly asserting that the US loses $100 billion each year to offshore tax evasion,” he explained, “the legislation he proposes to solve this alleged problem never comes close to matching his claims. FATCA is only expected by congressional score keepers to raise less than $800 annually over the next 10 years, despite costing considerably more in lost investment in the economy.” He concluded, “Senator Levin is up to the same old tricks in trying to quietly pass son-of-FATCA. Taxpayers are on to his game, and it won’t fly anymore.”
For additional information:
Andrew Quinlan can be reached at 202-285-0244, firstname.lastname@example.org
May 3, 2012
Dear Conference Member:
As you prepare to reconcile the Senate and House versions of the Surface Transportation Reauthorization Bill, I hope to bring to your attention an unrelated tax provision slipped into the Senate version of the bill which provides dangerous new authority to the Treasury Department and adds to the already onerous and unnecessary burdens of the Foreign Account Tax Compliance Act (FATCA).
The Levin-Conrad-Whitehouse amendment inserted provisions supposedly to “Stop Tax Haven Abuse,” but which would in reality further undermine global capital flows and the world economy. The amendment expands authority granted under the Patriot Act in order to give the Treasury Department unchecked powers to extend U.S. tax law beyond American borders. Treasury officials would be required to spend resources tracking and analyzing all jurisdictions around the world, and the degree to which they bow to US tax dictates. Treasury officials have no special expertise to make such evaluations, and history suggests any national tax blacklist would be arbitrary and discriminatory.
By empowering tax bureaucrats with the authority to determine if a jurisdiction is guilty of the vague crime of “significantly impeding United States tax enforcement,” and also granting them authority to impose punitive measures, the legislation further compounds the regulatory and economic mess created by FATCA. At a time when the costs of FATCA to the U.S. economy are still being tallied, it is particularly foolish to double down on such fiscal imperialism. Furthermore, the ongoing difficulty of implementing FATCA, which was similarly slipped into unrelated legislation and not sufficiently vetted by the appropriate committees of jurisdiction, should serve as a warning against allowing the same tactic again.
Adding to the burdens of FATCA will have economic repercussions. Incidences of expatriation, already at record levels, will increase with the new costs of American citizenship, resulting in both a loss of talent and tax revenues. The provisions will also likely result in further disinvestment from the US economy, limiting the availability of capital which serves as the lifeblood of economic growth.
For the above reasons, added to the simple fact that the transportation bill should be limited to dealing with issues actually related to transportation, I trust that you will ensure this provision does not make it out of conference.
Andrew F. Quinlan
President, Center for Freedom & Prosperity