WASHINGTON (Reuters) - The Republican National Committee (RNC) on Friday called for the repeal of a U.S. anti-tax-evasion law, siding with big banks, libertarians and American expatriates that have criticized the Obama administration statute.
At its winter meeting in Washington, the RNC approved by voice vote a resolution in favor of abolishing the 2010 Foreign Account Tax Compliance Act (FATCA), set to take effect in July, marking the party’s first explicit attack on the law.
FATCA will require most foreign banks and investment funds to report to the U.S. Internal Revenue Service information about U.S. customers’ accounts worth $50,000 or more. The law was enacted after a scandal involving Americans hiding assets in Swiss bank accounts to dodge U.S. taxes.
Critics have blasted the law as an unfair government overreach and invasion of financial privacy.
“The Republican National Committee ... urges the U.S. Congress to repeal FATCA,” said the measure, staking out a campaign position ahead of 2014’s mid-term elections.
On Wednesday, with the RNC vote expected to occur, a senior Treasury Department official said the vote would not hurt the administration’s efforts to implement FATCA via a web of tax information-sharing agreements with other countries.
Tax watchdog groups that support FATCA slammed the Republican vote. “It is mind-boggling that a major political party would even consider endorsing a resolution to facilitate tax evasion,” said Heather Lowe, director of government affairs at anti-graft watchdog group Global Financial Integrity.
“Repealing the law would cripple the U.S. and global efforts to fight offshore tax evasion,” she said in a statement.
The Center for Freedom and Prosperity, a group that advocates for lower taxes and financial privacy, praised the RNC vote. “The GOP’s adoption of FATCA repeal to its platform is a major victory for taxpayer privacy rights,” said the center’s Director of Government Affairs Brian Garst.
Republican Senator Rand Paul last year introduced legislation to repeal parts of FATCA, citing privacy concerns.
Repeal is unlikely and the issue was not expected to resonate with average U.S. voters, said lobbyists on both ends of the political spectrum. But they said Republican opposition to the law could help the party raise campaign funds.
Reporting by Patrick Temle-West; Editing by Kevin Drawbaugh and Alden Bentley