-- 'Model Agreements' Released by Treasury Make Problems Worse --
WASHINGTON, July 31, 2012 /PRNewswire-USNewswire/ -- The following is being released by Global Strategic Communications Group:
A letter by four U.S. Senators to Treasury Secretary Timothy Geithner demanding details of plans to impose sweeping new mandates on American financial firms is the "first nail in the coffin of a bad law," comments James George Jatras, a Washington-based legislative specialist and expert in international affairs. "FATCA was slipped in in the dark of night, with nothing like the scrutiny it should have received. Better late than never – Congress is waking up to the incalculable costs this ill-considered monstrosity would impose on Americans."
The letter to Secretary Geithner, from Senators Rand Paul (R-KY), Jim DeMint (R-SC), Mike Lee (R-UT), and Saxby Chambliss (R-GA), asks for specifics of a so-called "international approach" for enforcing the "Foreign Account Tax Compliance Act." The Senators' July 25 inquiry spotlights a February 2012 agreement between Treasury and five European Union countries to require domestic American financial firms to report personal financial data to foreign governments.
"FATCA as written is destructive enough," says Jatras. "But this supposed 'partnership' – which isn't even in FATCA, as enacted – compounds the harm exponentially. This is Treasury's own malign invention, a ploy to get foreign governments to submit to an otherwise unenforceable, counterproductive law. It's absolutely unacceptable."
The Senators' letter was sent just before Treasury released two versions of a "model agreement," designed to facilitate foreign enforcement of FATCA. "These so-called 'models' raise more questions than they answer," charges Jatras. "How much will all of this cost? Whose information will be compromised? What would be the role of OECD, with its push for global taxes? That's what the Senators are asking. It's especially important that media press Treasury to provide real answers."
Jatras, who manages www.RepealFatca.com and tweets on @RepealFatca, sees the Senators' letter as a turning point: "American business, and Americans in general, have been asleep at the switch. They haven't noticed this approaching parade of horribles: less investment in the U.S. and fewer jobs, decimation of America's expatriate sales force abroad, higher consumer costs, and a global financial fishbowl leading to an international tax regime. Conversely, foreign firms and governments have been misled in to believing that FATCA's already a 'done deal' and they have to submit. For all concerned, this letter is a real fire bell. It's time to get behind critics in Congress, block FATCA's enforcement, and get it repealed."
Passed in 2010 with little review and no cost/benefit analysis, FATCA regulations due to go into effect in January 2013 would require every foreign financial institution in the world to report U.S. assets to the IRS or face a 30% penalty on U.S.-derived income.