United States Sen. Rand Paul (R-KY) is suing the Internal Revenue Service and the Department of the Treasury over the constitutionality of the Foreign Account Tax Compliance Act (FATCA).
Paul and six other plaintiffs argue the Department of the Treasury is using FACTA to bypass the legislative branch of government’s exclusive authority to approve treaties with foreign nations.
‘Sort of Sneaky Ways’
Andrew Kloster, a legal fellow with The Heritage Foundation, says FATCA affects all Americans, regardless of whether or not they invest money overseas.
“FATCA represents another attempt by [the Obama] administration to raise revenue through sort of sneaky ways and to attempt to extend the regulatory reach of the IRS … globally,” Kloster said. “So, it’s really just a part of a pattern of how this administration has been handling wealth in general.”
Extending American Policies Overseas
Kloster says FATCA improperly extends American tax policy into other countries.
“Switzerland and some other countries have been put over a barrel and have started complying with it,” Kloster said. “That’s not because we have anything on them, because we can’t really sue them. It’s not because we have any treaty or international law obligations here, but it’s just because they know the United States is a big player and [our government] can cause a lot of problems with them [using] the laws that are already on the books.”
‘It’s Just Awful’
Veronique de Rugy, a senior research fellow of the Mercatus Center at George Mason University, says FATCA is “awful.”
“It’s just awful,” de Rugy said. “[Under] the new treaties with the United States, some 100,000 foreign financial institutions in more than 100 countries must report to the Treasury on the accounts of any so-called U.S. person or U.S. citizen, [as well as] anyone with an immigrant card or work permit. This is a clear, credible violation of financial privacy.”
De Rugy says Paul’s constitutional challenge to FATCA should be encouraged.
“I think he’s right to do this,” de Rugy said. “I think it’s just one more attempt by the U.S. government, supported by a lot of international organizations, to destroy financial privacy around the world.”
A Privacy FATCA-strophe
“Everyone should care about financial privacy, [even though] this may not affect a majority of people,” de Rugy said. “[It’s another] sign of the lack of respect from our government for financial privacy. It’s not okay because it affects other people. Either you believe in financial privacy, or you don’t.”
Amelia Hamilton ([email protected]) writes from Traverse City, Michigan.
Bruce W. Bean and Abbey Wright Farnsworth, “The U.S. Foreign Account Tax Compliance Act: American Legal Imperialism?” ILSA Journal of International & Comparative Law: https://heartland.org/policy-documents/us-foreign-account-tax-compliance-act-american-legal-imperialism/
The photo, “United States Department of the Treasury Washington, D.C.” is copyright © 2010 Florian Hirzinger , and was made available under a Creative Commons Attribution-Share Alike 3.0 Unported license.