[Link to Signed PDF Copy]
February 27, 2003
The Honorable John Snow
Secretary of the Treasury
Department of Treasury
1500 Pennsylvania Avenue
Washington, DC 20220
Dear Secretary Snow,
I write to request that you withdraw a proposed IRS regulation (REG-133254-02), which would adversely affect the American economy at a time when we can ill afford it.
While, I am pleased with the President's economic growth package, this proposed IRS regulation is counter-productive, offsetting pro-growth features of the President's package. Indeed, implementation
of this regulation-which would force American banks to report the deposit interest paid to nonresident aliens-would hurt the American economy by diverting overseas investments away from our economy.
While nonresident alien deposits are only a portion of the $1.7 trillion of foreign capital in the U.S. banking system, the capital outflow as a consequence of this regulation's implementation could be significant.
The proposed IRS regulation reverses long-standing U.S. policy of welcoming foreign capital to our shores, and it encroaches on policy-making territory reserved to Congress. Moreover, this
regulation seems to make the United States a collaborator with oppressive tax systems abroad.
There seems to be no other reason for collecting this information since our government does not collect taxes on interest paid to nonresident aliens.
I ask that you permanently withdraw this regulation as soon as possible, and I look forward to working with you to see the expeditious enactment of the President's economic growth package.
United States Senator