It's important to keep in mind the seven tax treaties are themselves innocuous and even desirable from the standpoint of avoiding double taxation for Americans doing business overseas. But contrary to Chairman Corker's letter, ratifying them without fixing their constitutional defects facilitates their use as vehicles for data reporting under the legally dubious FATCA "intergovernmental agreements," many of which also require "reciprocal reporting" from domestic U.S. institutions to foreign governments. This would hit U.S. banks, credit unions, insurance companies, mutual funds, etc. with costs comparable to those FATCA imposes on foreign institutions, which run into the millions per financial institution (for example, Canada's Bank of Nova Scotia alone already had spent $100 million as of 2013). Imposing the same burdens here in the U.S. would mean billions of dollars extracted from American consumers and taxpayers, spurring massive capital flight from the United States and lost jobs. That's why U.S. credit unions have written to the Congressional leadership to oppose domestic expansion of FATCA, which would "increase regulatory burdens on American credit unions and banks without resulting in a single dollar of new tax revenue to the Treasury."
Finally, the seven treaties are a stalking horse for another item on Obama's and Lew's political bucket list: a so-called "Protocol amending the Multilateral Convention on Mutual Administrative Assistance in Tax Matters" that would lock in a FATCA-like international "common reporting standard" as treaty obligation. The result would be essentially FATCA gone global--sometimes called GATCA-- which in would be set for a global tax under United Nations auspices, pressure on the U.S. to raise our domestic tax rates, and subjecting our country to the oversight of bureaucrats at the Organization for Economic Cooperation and Development and other international organizations.
Republican leaders should not provide ex post facto authority for Obama's and Lew's reciprocal FATCA and GATCA schemes, which would also hand embattled IRS Commissioner John Koskinen sweeping new regulatory powers. It comes as no surprise that President Obama seeks to impose these burdens on America as his parting gift. What is deplorable is that any Republican leader would help him do it. Instead of promoting Obama's global regime, it's time for Senate Republicans to put America first. They should join Senators Paul and Lee in ensuring these treaties are not ratified until Obama leaves office, and get ready to send President Donald Trump a FATCA repeal bill early next year.
(Article changed on June 19, 2016 at 18:01)
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