RNC boss throws weight behind legal effort to overturn overseas banking law

Overturning FATCA, despised by ex-pats, key in Reince Priebus’ Republican Overseas initiative



National Republican Party Chairman Reince Priebus announced that the RNC gave $20,000 to help finance the Republicans Overseas’ legal action. (Associated Press) more >

By Ralph Z. Hallow - The Washington Times - Thursday, August 7, 2014
CHICAGO — When Republican National Committee Chairman Reince Priebus stopped by a $5,000-a-plate fundraiser at the party’s annual summer meetings here, he signaled his full support for a legal effort to overturn a federal banking law that is antagonizing many Americans living overseas.
For smiling attendees, Mr. Priebus’ appearance Wednesday night in a private dining room at the Four Seasons Hotel was not only good policy, it was good politics.
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The so-called FATCA law, despised by many American ex-pats, has become one of the rallying cries of the new Republican Overseas initiative, a burgeoning effort to woo U.S. voters living abroad to vote for the GOP in the next two elections.
Republicans Overseas is led by Hong Kong corporate acquisition attorney and Illinois native Michael DeSombre. He joined the dinner along with 20 other Americans living, working or investing overseas. Money from the dinner will be used to support a lawsuit seeking to overturn FATCA — the Foreign Account Tax Compliance Act passed in 2010 — on three constitutional grounds.
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Mr. Priebus told the crowd that the RNC gave $20,000 to help finance the Republicans Overseas’ legal action. The RNC also supports a resolution sponsored by Oregon RNC member Solomon Yue, who is also Republicans Overseas vice chairman and CEO, to end what critics say is the double taxation faced by Americans living and working overseas.
“The United States is the only country in the world — besides Eritrea — that has citizenship-based taxation,” Republicans Overseas Worldwide Vice President Janet Halper-Hayes told Mr. Priebus. “That means we get taxed twice — by both the IRS and the government of the country where we live and work.”
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Mrs. Halper-Hayes told Mr. Priebus that every other country in the world uses residence-based taxation.
“So a British or Swiss or German citizen pays taxes only in South Africa or Australia or the Philippines, where he lives and works or has a business and employs Americans and local people.”



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Nodding his head, the Republican Party chief announced he was committing the RNC to give money to Republicans Overseas to help pay for its lawsuits against the U.S. government.
Foreign banks balk
FATCA was passed by a Democrat-led Congress in what sponsors said was an effort to target tax evasion by U.S. nationals abroad.
The law empowers the Internal Revenue Service, without warrants, to require foreign banks to provide information about the bank accounts of overseas Americans. That burden has caused some foreign banks to stop offering accounts to Americans.
As a result, many U.S. citizens say they are having trouble establishing bank accounts overseas. Some even have renounced their American citizenship or sell their businesses to avoid compliance with the law.
The purpose of the legal action is to win relief from what many conservatives believe is a law that violates the financial privacy of law-abiding Americans just because they live abroad.
But what is most important, Mr. Yue said, is to get the U.S. government to end the double taxation of Americans overseas.
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What annoys big-picture executives like Mr. DeSombre is the nexus between FATCA and the 34-member Organization for Economic Cooperation and Development based in Paris.
“FATCA is the foundation of the OECD drive for global financial information sharing,” said Mr. DeSombre. “Without the U.S. enforcing FATCA, any global drive to share financial information would fail because it would not be valuable without the U.S. participating.”
Mr. DeSombre said the OECD global financial information sharing push is intended to create “complete transparency” for corporations and individuals as to where and how much they pay in taxes.
That in turn “will also require transparency — that is, no privacy — in how much money corporations and individuals earn and where they keep it,” Mr. DeSombre said. “One of the purposes of this is to discourage companies and individuals from taking advantage of lower taxes in other countries.”
Mr. DeSombre said he took up the mantle of Republicans Overseas because the “interests and concerns of Americans overseas have not been well reflected in the Republican Party in the past.”
By connecting Americans overseas more closely with the Republican Party, overseas Americans’ concerns will be better addressed, he said.
“In my day job representing companies outside of America, it also has become clear that American tax policy, both corporate and individual, deters companies from incorporating businesses in America and discourages individuals from emigrating to America — or remaining as American citizens,” he said.
He said the Democratic Party and the Obama administration seem to think incentives don’t matter — that making it very expensive for companies and individuals to be American will have no negative consequences for the U.S. economy.
“In the world today, corporations and individuals all have choices of where to be located, and America is doing its best to discourage being American,” Mr. DeSombre said. “Think of wealthy persons around the world looking to live somewhere or start a business. These are exactly the sorts of persons we should be attracting to America to start businesses and employ Americans.”