**Coalition Speaks Out**
The Washington, D.C.-based Coalition for Tax Competition is seeking the “immediate” withdrawal of IRS Regulation 133254-02.
Yesterday in Washington, DC the Center for Freedom and Prosperity, joined by more than 30 of the country’s largest and most influential free-market groups, urged Treasury Secretary Paul O’Neill to withdraw the proposed regulation to require the reporting of bank deposit interest paid to nonresident aliens.
In a letter sent to the Treasury Secretary, the members of the Coalition stated, *”This regulation is bad tax policy and bad regulatory policy. It is inconsistent with President Bush’s tax reform agenda and it will hurt the U.S. economy by reducing the amount of capital for workers, consumers, homeowners, and entrepreneurs.”* The letter was copied to all United States Senators and Members of the United States House of Representatives.
Andrew F. Quinlan, President of the Center for Freedom and Prosperity, said *”It would be a major blunder if the Administration failed to withdraw this ideologically motivated IRS regulation – especially since a significant amount of capital investment will flee the U.S. economy if it is implemented.”*
The Coalition for Tax Competition’s letter listed ten reasons why the proposed regulation should be withdrawn:
1. The IRS is abusing its regulatory authority.
2. The proposed regulation flouts existing law.
3. Capital will flee the U.S. economy if the regulation is implemented.
4. The regulation will make U.S. banks less competitive.
5. Banks will face a heavy paperwork burden.
6. The proposed regulation is bad tax policy.
7. The IRS failed to perform legally-required cost/benefit analysis.
8. The proposed regulation will undermine fiscal competition.
9. The IRS is playing the politics of divide-and-conquer with the
regulation.
10. The regulation violates the Treasury Department’s position on information-sharing.
The “comment period” for the proposed Regulation ends today.