* Paul has hold on three treaties, more in the pipeline
* Businesses eager for treaties to win Senate approval
By Patrick Temple-West
WASHINGTON, April 28 Senator Rand Paul is coming
under pressure from some multi-national businesses to drop his
opposition to tax treaties between the United States and other
Citing privacy concerns about Americans' tax data, Paul, a
Republican and libertarian, has single-handedly blocked Senate
action on treaties with Hungary, Switzerland and Luxembourg that
have been signed by authorities on both sides, but have been
awaiting Senate review since 2011.
At least six other tax treaties or treaty updates -- with
Chile, Spain, Poland, Japan, Norway and Britain -- may soon be
added to the Senate's queue for confirmation votes.
Major U.S. businesses such as IBM Corp and Fluor
Corp are lobbying for Senate action on tax treaties,
according to Senate lobbying disclosure documents.
"How many treaties will be held hostage?" asked Cathy
Schultz, a lobbyist for the National Foreign Trade Council, a
Washington, D.C.-based group that represents companies such as
Caterpillar Inc and Pfizer Inc.
Paul has said he is concerned that recent treaties would
give foreign governments too much access to U.S. citizens' tax
information, a stance that has some support among like-minded
"Rand Paul is not a typical senator who may bend over to
business lobbyists," said Chris Edwards, director of tax policy
at The Cato Institute, a libertarian think tank.
"I am very concerned about this increasingly aggressive
international exchange of information," Edwards said.
NO APPROVALS SINCE 2010
No new tax treaties or treaty updates have been approved
since 2010, when Paul was elected as the junior senator from
Kentucky on a wave of support for Tea Party-aligned Republicans.
Paul recently declined to answer questions from a reporter
in a Capitol hallway about the "hold" he has placed on the
treaties. Under Senate rules, one senator can prevent a motion
from reaching a vote on the Senate floor.
Paul's staff did not reply to repeated requests for comment.
"There's never really been an objection of this sort and a
hold that's gone on this long," said Nancy McLernon, president
of the Organization for International Investment, which lobbies
in Washington on behalf of foreign companies.
In an effort to sway the senator, McLernon said her group
would be lobbying both parties to draw attention to the tax
treaties. "Let's stop with the self-inflicted wounds," she said.
The United States has tax treaties with more than 60
countries, ranging from China to Kyrgyzstan.
The agreements previously have routinely won Senate approval
with little controversy and accomplished their main purpose of
preventing double-taxation of income and profits.
In recent years, tax treaties have begun to play an
increasing role in efforts by the United States and major
European Union countries to crack down on tax avoidance.
The U.S. Treasury in 2012 began signing new tax pacts with
countries as part of implementation of the U.S. Foreign Account
Tax Compliance Act, a 2010 anti-tax-evasion law.
The law, known as FATCA, which takes effect in January 2014,
will require foreign financial institutions to disclose to the
United States information about Americans' accounts worth more
SWISS A DRIVING FORCE
Switzerland, a long-time bastion of banking secrecy, is
under international pressure to change its ways, and FATCA has
been a driving force in that. The United States and Switzerland
in February signed a FATCA implementation agreement that would
make more information available to U.S. authorities about the
financial interests of Americans in Switzerland.
But the taxpayer information exchange cannot go into force
without Senate approval of the U.S.-Swiss tax treaty.
The Senate's delayed action on tax treaties could convince
other countries to stop negotiating with the United States on
tax matters, said John Harrington, a former Treasury tax
official who is now a partner at law firm SNR Denton.
Paul, seen as a possible 2016 presidential contender, has
taken a position that sets up a clash of traditional Republican
interest groups: big business and libertarian ideologues.
In this sense, Paul is in the forefront of the party's
search for a new identity since Republicans lost the
presidential race last year, as well as numerous seats in the
House of Representatives.
Looking toward a possible 2016 White House bid, Paul told
reporters earlier this month that he will visit early-voting
states this year and make a final decision next year.
New Republicans such as Paul are shifting the party away
from its business-first agenda, said Dan Holler, communications
director for Heritage Action, a conservative group.
"The party is not being reflexively pro-business," he said.