Center for Freedom and Prosperity
For Immediate Release
Thursday, October 25, 2012
Latest FATCA Delay Bolsters Case for Repeal, Says CF&P President
(Washington, D.C., Thursday, October 25, 2012) Yesterday the Treasury Department announced yet another delay in the time line for bringing into force FATCA, the Foreign Account Tax Compliance Act. Even though it was passed over two years ago, the Treasury Department has yet to release final rules implementing the legislation. CF&P President Andrew Quinlan offered the following statement following news of the latest delays:
“The continued inability of regulators to release final FATCA rules provides yet further evidence that the law was ill-conceived and should never have been passed in the first place. We already know that it will inflict higher costs on the financial industry than it will deliver in tax revenue, is driving foreign investment out of the US, and is pushing more and more Americans living abroad to renounce their citizenship, but now we can add regulatory uncertainty to the list of burdens.
While foreign and domestic financial institutions are taking a beating, it’s ultimately the American people who will bear the brunt of FATCA. Consumers who engage in financial activities will face higher costs, and reduced investment will mean fewer jobs for American workers. Unfortunately, as this is a mess wholly created by Congress, only Congress can fix it. They must repeal FATCA now.”
Passed in 2010 as part of the Hiring Incentives to Restore Employment Act, FATCA threatens foreign financial centers with a 30% withholding requirement on US accounts if they don’t comply with draconian new reporting requirements. Citing the added hassle, many institutions have already begun dropping American clients and divesting of US holding, reducing much needed investment in the US economy. With fewer institutions willing to serve them, Americans living overseas are finding it difficult simply to open bank accounts, and are renouncing their US citizenship at a growing rate.
CF&P’s Director of Government Affairs, Brian Garst, added, “FATCA is based on the lawmaker fantasy that we can tax our way to fiscal solvency. The reality, however, is that for all the costs imposed by this misguided foray into fiscal imperialism, the law won’t even raise enough in ten years to fund the government for a single day at present levels. FATCA is simply madness.”
CF&P’s mission is to educate the public and members of Congress on the benefits of tax competition, financial privacy and fiscal sovereignty, including how passage of laws like FATCA will backfire and drive investment out of the US economy.
For more information on FATCA visit http://freedomandprosperity.org/issues/foreign-account-tax-compliance-act/