Republican National Committee Calls for FATCA Repeal; Hopes to Earn US Expat Vote

As the Republican National Committee (RNC) looks towards the 2016 presidential election, one of their target demographics will be American citizens living abroad. While this group has historically belonged to Democrats, the RNC believes that with the inception of FATCA this year, more and more expats will support the Republican’s agenda to better protect their financial privacy. A resolution to repeal FATCA has won the support of key RNC members and is slated for vote during the party’s winter meeting later this month.

FATCA and Americans Abroad

FATCA, the Foreign Account Tax Compliance Act, was instituted in 2010 (but the true rollout begins this year) in an effort to uncover tax cheats who are hiding substantial assets in overseas bank accounts. FATCA requires American taxpayers to report their assets if they exceed certain thresholds, but more importantly, it requires foreign banks and financial institutions to report on the account information of their American clients. While there has been worldwide cooperation by the foreign banks, there are also widespread reports of banks refusing American clients’ business or simply closing their accounts to avoid the hassle of FATCA compliance.

Rand Paul, son of former presidential candidate Ron Paul, has led the charge to repeal provisions within the law that he believes violate taxpayers’ privacy rights. The RNC plans to push Congress even further, with the ultimate goal of repealing the law.

According to a Washington Times article, Solomon Yue, a prominent RNC member from Oregon who is leading the charge on the issue, said “The law as it stands forces US citizens to make a modern day’s ‘Sophie’s choice’ between their love for their country by not renouncing citizenship and their love for their families by continuing to provide for them without banking services.”

The Obama administration continues to defend FATCA, as they believe it has become a worldwide standard in fighting global tax evasion. A spokesperson has dismissed much of the criticism about the law, including allegations that it puts an undue burden on banks, that Americans abroad will continue to encounter ‘banking discrimination,’ and that more Americans will seek to renounce their citizenship in order to avoid the tax burden and subsequent hassles of filing US taxes. But the RNC believes it is a large issue and that US expats will be willing to change their vote to improve their lives abroad.

“For many years, the Democrat Party used its overseas group, Democrats Abroad, as a political weapon against our candidates in elections,” said Arizona RNC member Bruce Ash, chairman of Republicans Overseas. This significant push from the Republican Party to fight back against Democrats Abroad is well-timed, as the worldwide frustration with FATCA is rapidly rising.

Democrats Abroad has a leg up in attracting overseas voters, as it has chapters throughout Europe, the Americas, the Middle East, Africa, Asia and of course, the support of the office in Washington.

Mr. Ash also commented that foreign banks are facing higher costs associated with IRS reporting requirements and as a result, Americans are being forced into a choice between their citizenship and their right to financial privacy.

The resolution to repeal FATCA gained 26 co-sponsors, including all of the RNC Resolution Committee members, which virtually guarantees that the resolution will pass when voted on later this month.

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