Center for Freedom and Prosperity Foundation
For Immediate Release
Tuesday, April 19 2011
202-285-0244
www.freedomandprosperity.org
Three Senators Ask for Withdrawal of
Destructive IRS Regulation
(Washington, D.C., Tuesday, April 19, 2011) The Center for Freedom and Prosperity and the Coalition for Tax Competition are pleased to acknowledge the strong stand three Senators have made against a proposed IRS regulation to collect additional and unnecessary information from nonresident aliens who invest in the United States. Florida Senator Rubio, and Texas Senators Cornyn and Hutchison all requested “withdrawal” of the regulation (REG-146097-09), which would force U.S. banks to report deposit interest paid to nonresident aliens.
“Our only hope in defeating this destructive regulation is with the type of leadership demonstrated by Senators Rubio, Cornyn and Hutchison,” said Andrew Quinlan, President of the Center for Freedom and Prosperity. “Given the destructive impact this rule would have on the U.S. economy, we expect many more Members of Congress to join the opposition in the near future.”
Excerpts from the letters
In a letter to the President, Florida Senator Rubio wrote:
At a time when unemployment remains high and economic growth is lagging, forcing banks to report interest paid to nonresident aliens would encourage the flight of capital overseas to jurisdictions without onerous reporting requirements, place unnecessary burdens on the Americans economy, put our financial system at a fundamental competitive disadvantage, and would restrict access to capital when our economy can least afford it.
Texas Senators Hutchison and Cornyn also signed a letter to Treasury Secretary Geithner in opposition to the regulation. It included the following comments:
Forgoing the taxation of deposit interest paid to certain global investors is a long-standing tax policy that helps attract capital investment to the United States. For generations, these investors have placed their funds in institutions in Texas and across the United States because of the safety of our banks. Another reason that many of these investors deposit funds in American institutions is the instability in their home countries.
Unfortunately, the IRS’s proposed regulation flies in the face of our nation’s longstanding efforts to attract capital…
These letters come on the heels of a letter from the entire Florida delegation in the House of Representatives, which also condemned the rule. In addition, the Coalition for Tax Competition has released a letter urging Secretary Geithner to withdraw the regulation.
The proposed regulation would discourage foreign investment and drive capital out of the U.S., as CF&P has previously explained in more detail. It would endanger financial institutions and the U.S. economy at a time when both are already struggling to recover from the financial crisis.
The Center for Freedom and Prosperity, along with other members of the Coalition for Tax Competition, will testify at the public hearing on the regulation to be held on May 18th. When a similar rule was proposed in the early 2000s, opposition at the hearing was unanimous. Based on the public submissions thus far, opposition is expected to be overwhelming once again.
For additional comments:
Andrew Quinlan can be reached at 202-285-0244, andy@freedomandprosperity.org
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