Center for Freedom and Prosperity
For Immediate Release
Tuesday, July 31, 2012
CF&P President: Congressional Vote on IRS Regulation is First Step in Reasserting Proper Legislative Role in Policymaking
Washington, D.C., Tuesday, July 31, 2012) Last week the House of Representatives voted with bipartisan support (251-165) to approve an amendment to the Red Tape Reduction Act (H.R. 4078) that would include the recently adopted IRS regulation requiring reporting on nonresident alien interest deposit information among the regulations to be delayed until unemployed drops below 6%. Andrew Quinlan, President of the Center for Freedom and Prosperity, offered the following statement:
“The House has taken a first and necessary step in taking back the power to pass regulation from an IRS agency that has gone rogue. With passage of this rule, Treasury Secretary Geithner and the Obama Administration usurped the authority of Congress to determine how best to attract much needed foreign investment to the US. Thanks to the leadership of Congressman Posey, the House has began taking that authority back. I call on the Senate to follow suit, and then for this temporary delay to be made permanent.”
Congress has long opposed agency efforts to implement the reporting regulation, which undermines more than 90 years of Congressional intent on foreign investment. Each time the issue of foreign deposits has come up, Congress has specifically decided not to tax it nor asked for it to be reported. The IRS facilitating taxation by other governments will have the same economic impact as if the US taxed it directly, thus undermining the clear intent of Congressional policy.
The IRS has also flaunted legal requirements for regulatory enactment, such as requirements that economically significant rules be accompanied by a cost-benefit analysis. They have never conducted a proper analysis because there are no direct benefits to which they can point. A study by the Mercatus Center on an earlier, more limited and thus less damaging, version of the rule estimated the US would lose $88 billion in foreign investment, well above the $100 million impact necessary to trigger the cost-benefit requirement.
CF&P has fought various versions of this regulation for over 10 years, successfully delaying the rule on several occasions. The vote on Rep. Posey’s amendment represents another victory for those who believe not only that ensuring American requires keeping it an attractive destination for capital, but in the rule of law and proper checks and balances.
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Andrew Quinlan can be reached at 202-285-0244, email@example.com