Center for Freedom and Prosperity Foundation
For Immediate Release
Tuesday, March 20, 2012
202-285-0244
www.freedomandprosperity.org
New CF&P Libertas Paper Outlines Danger of
Proposed IRS Interest-Reporting Regulation
(Washington, D.C., Tuesday, March 20, 2012) The Center for Freedom and Prosperity Foundation released today a policy brief highlighting the severe economic damage that would result from adoption of an IRS proposal (REG-146097-09) to require U.S. banks to put foreign law above U.S. law by reporting deposit interest paid to non-resident aliens. Entitled, “Proposed IRS Interest Reporting Regulation Threatens U.S. Economy,” the paper is the second in CF&P’s new Libertas series. The two-page report provides a short history of the 12-year saga of the proposed Clinton-era regulation and explains why it is bad policy.
Link to the Libertas paper:
http://freedomandprosperity.org/2012/publications/interest-reporting-regulation-threatens-economy/
The paper brings four specific charges against the regulation: 1) It will drive capital from the U.S. and harm economic growth, 2) It violates the intent of Congress, 3) The IRS has failed in their legal duty conduct a cost-benefit analysis, and 4) It undermines human rights in many parts of the world.
Andrew Quinlan, President of the Center for Freedom & Prosperity, noted, “For more than 10 years, the IRS has been trying to undermine existing law solely for the benefit of foreign governments trying to track and tax flight capital. This proposal undermines the ability of the U.S. to attract foreign investment, which is why it faces overwhelming opposition from legislators, industry and the public. In spite of these facts, the IRS bureaucrats seem intent on going forward with the rule and placing the interests of foreign tax collectors above that of the Americans who pay their salaries.”
“This is a very misguided regulation that is based on very bad tax policy,” added Dan Mitchell, a Senior Fellow at the Cato Institute and Chairman of CF&P’s Board,”but it’s only the beginning. If the IRS is allowed to get away with writing new tax policy through this regulation, it’s a safe bet that they’ll soon double down and require reporting of other forms of interest and capital gains.”
Link to dedicated CF&P web page on the proposed IRS regulation:
http://freedomandprosperity.org/issues/irs-information-sharing-regulation/
CF&P has also previously released a video on the topic titled, “The IRS Running Amok: Forcing Americans Banks to Put Foreign Tax Law Above U.S. Tax Law.”
Video Link: http://youtu.be/kPVVoqDkLHw
For additional comments:
Andrew Quinlan can be reached at 202-285-0244, andy@freedomandprosperity.org
Dan Mitchell can be reached at 202-218-4615, dmitchell@cato.org
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