WASHINGTON (Reuters) - Republican Senator Rand Paul on Wednesday said he will prevent Senate votes on five international tax treaties, including one with Switzerland, arguing that they would intrude on the privacy of American citizens, but business groups condemned his move.
Under U.S. Senate rules, a single senator has the power to delay legislation from reaching a vote on the Senate floor by placing a “hold” on it.
In a letter to the Senate’s Democratic leadership, Paul, seen as a potential 2016 U.S. presidential candidate, said his hold applies to tax treaties with Switzerland, Luxembourg, Hungary, Chile and the Organization for Economic Cooperation and Development.
The treaties were approved by the Senate Committee on Foreign Relations in April and are awaiting a vote by the full Senate.
The tax treaty with Switzerland could help U.S. authorities collect more names of U.S. citizens who hid money in Swiss banks to dodge taxes.
Paul said he will object to any request for unanimous consent, motion or waiver of any rule on the treaties.
“These new bulk collection treaties demand Americans’ records under a vague standard” that could allow a foreign government to get U.S. individuals’ bank information “for hardly any reason at all,” Paul said in the letter to Senate Majority Leader Harry Reid, which was obtained by Reuters.
“To be clear, I certainly do not condone tax cheats, but I can’t support a law that endangers regular foreign investment and punishes every American in pursuit of a few tax cheats,” Paul said.
The United States has tax treaties with more than 60 countries, ranging from China to Kyrgyzstan. But no new tax treaties or treaty updates have been approved since 2010, when Paul was elected as a senator from Kentucky on a wave of support for Republicans aligned with the conservative Tea Party movement.
Business groups blasted Paul for his hold on the treaties.
“This will continue to hurt the competitiveness of the U.S. to attract business,” said Nancy McLernon, president of the Organization for International Investment, which lobbies in Washington on behalf of foreign companies.
Reporting by Patrick Temple-West; Editing by Steve Orlofsky