On Friday, the Republican National Committee passed a resolution calling for a repeal of the Foreign Account Tax Compliance Act (FATCA), effectively endorsing offshore tax evasion. FATCA was passed in 2010 and requires foreign banks to report deposit information on account holders from the United States, a requirement that U.S. banks must comply with. The purpose of the law is to prevent U.S. citizens from evading taxes by stashing their money in offshore accounts. If the repeal became law, Global Financial Integrity (GFI), a nonpartisan research and advocacy organization, projects that the U.S. budget deficit would balloon by billions of dollars.
“It is mind-boggling that a major political party would even consider endorsing a resolution to facilitate tax evasion,” said Heather Lowe, legal counsel and director of government affairs at GFI. “Tax haven secrecy is estimated to cost U.S. taxpayers $150 billion per year....Tax evasion and illegality do not belong in the official platform of any political party. FATCA is the most important reason why you can’t just park your money in a Swiss bank and stop paying taxes anymore. Repealing the law would cripple the [United States] and global efforts to fight offshore tax evasion. Foreign financial institutions should not be able to harbor the illicit assets of U.S. tax evaders.”
Sen. Rand Paul (R-Ky.) has played a key role in preventing the proper functioning of FATCA to date. He has blocked several treaties that are necessary for the law to be fully functional. “Ratification of the agreements has widespread support. Sen. Paul should allow an up-or-down vote on the treaties,” Lowe said.