- The Washington Times - Tuesday, September 23, 2014

Mike Lee, the junior senator from Utah who captured America’s fancy in January when he gave a rebuttal to President Obama’s State of the Union address, is now planning to take Europe by storm.

Mr. Lee is heading to Paris in October as part of a four-city barnstorming tour to rally support against a U.S. tax law that is affecting 7 million Americans living and working overseas, officials told The Washington Times.

He will be joined by conservative superlawyer James Bopp on a trip that will burnish the Utah Republican’s foreign policy credentials and his burgeoning reputation for defending individual rights against government intrusion.

The two men’s target will be the Foreign Account Tax Compliance Act, approved by a Democrat-controlled Congress in 2010. Critics say it is invading banking privacy and treating all Americans abroad as tax evaders until they can prove otherwise.

The law has been blamed for hundreds of Americans renouncing their U.S. citizenship.

“This is another example of dysfunctional government policy that is hurting middle-class Americans, treating them unfairly and ultimately doing much more harm than good,” Mr. Lee told The Times. “It shows the need for significant tax reform that removes — not strengthens — the barriers standing in the way of each American’s unique pursuit of happiness.”

SEE ALSO: Marco Rubio and Mike Lee release pro-family and pro-growth tax plan

The initial purpose of the law was to shutter foreign tax havens to super-rich tax evaders, but it has created unintended negative consequences that critics say far exceed any intended benefits.

The son of President Reagan’s solicitor general, Mr. Lee prides himself on his Senate role as defender of fiscal responsibility and constitutional principles and has become a favorite of the tea party since his election in 2010.

A Senate Judiciary Committee member, Mr. Lee delivered the tea party response to Mr. Obama’s State of the Union speech this year, creating an alternative to the Republican establishment’s formal response.

Mr. Bopp is the constitutional lawyer from Indiana who has won nine cases before the U.S. Supreme Court, including the landmark Citizens United decision that restored free speech rights to labor unions and corporations for unimpeded spending to elect or defeat, by name, a candidate for federal office.

Mr. Bopp and Mr. Lee on Oct. 6 plan to meet, greet and address members of the Association of Americans Resident Overseas, a nonpartisan group with headquarters in Paris. Details are announced on its website, AARO.org.

In welcoming the two Republicans, the AARO described Mr. Bopp as “the lawyer who wants to take FATCA to the Supreme Court, challenging its constitutionality.”

AARO has told its Paris members that Mr. Bopp and the senator from Utah will explain why the Foreign Account Tax Compliance Act is an invasion of privacy, an overstepping of the Treasury Department’s authority and a tool for “cruel and unusual punishment.”

The cruel and unusual punishment angle stems from thousands of foreign banks and other financial institutions dropping their American clients rather than enduring the bookkeeping expense of complying with the act.

The law also empowers the U.S. Treasury to confiscate up to 30 percent of an American citizen’s retirement check that a U.S. bank sends to a foreign bank that has not complied with provisions of the act.

The tax compliance law permits the U.S. Treasury to confiscate half of anything a U.S. citizen has in a foreign bank if the citizen fails to tell the Treasury about the account and how much money the account holds. The penalty applies even if the U.S. citizen owes no taxes.

What rankles critics more than anything else is that the Foreign Account Tax Compliance Act leaves expatriation as the only option for thousands of Americans residing overseas.

U.S. Treasury figures indicate that 1,577 Americans have renounced their citizenship so far this year and that the total for 2013 was 2,999, a 220 percent increase over 2012 figures. The reasons for giving up U.S. citizenship are not stated, but the huge jump in the numbers coincides with the enactment and enforcement of the Foreign Account Tax Compliance Act.

Democrats see the act as a matter of ensuring tax fairness for all while creating financial inconveniences for some. Republicans see it as sacrificing constitutional rights for those tax fairness goals.

The administration’s reaction to the leap in expatriations has been to have the State Department this month increase the fee for renouncing citizenship from $450 to $2,350, a 422 percent increase.

In 2012, Democratic Sens. Charles E. Schumer of New York and Robert P. Casey Jr. of Pennsylvania pushed through a bill to double the levy for overseas Americans leaving the U.S. for tax reasons.

“This administration is building a virtual Berlin Wall to keep overseas Americans from renouncing their citizenship,” said Bruce Ash, chairman of Republican Overseas Action Inc.

The wall from Mr. Casey’s viewpoint is to keep high-tech entrepreneurs and others from sending billions of dollars in profits to golden tax shelters with foreign addresses.

“We simply cannot allow the ultra-wealthy to write their own rules,” Mr. Casey said at the time.

After Paris, Mr. Lee and Mr. Bopp will hit London, Luxembourg and Geneva. Mr. Bopp’s aims are to promote the lawsuit against the Foreign Account Tax Compliance Act and to recruit plaintiffs for the case he is building in the United States.

Mr. Lee is onboard to talk up tax fairness for middle-class Americans before an audience that is acutely interested in such reform.

Although the aims of the two men differ, they also overlap. Mr. Bopp is working on a legal remedy to cut the legs from compliance enforcement, and Mr. Lee is there to explain how he plans to defang the Foreign Account Tax Compliance Act legislatively.

“All Americans have a stake in stopping FATCA,” Mr. Bopp said, “since it is already being pushed by the U.N. for adoption in all countries and could serve as a model for new snooping efforts by the IRS here at home.”

The effort was the brainchild of the founders of Republicans Overseas Action.

One of its goals is to systematically register and get ballots to millions of Americans who live and work abroad but generally neglect to vote in U.S. presidential elections.

Republicans hope their campaign can win the allegiance of independents and a good chunk of Democrats abroad, too.

• Ralph Z. Hallow can be reached at rhallow@gmail.com.

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