From his position on the House Financial Services Committee last week, Florida Republican Congressman Bill Posey took aim at a proposal from the Internal Revenue Service (IRS) which would change a policy, forcing nonresident aliens to report interest garnered in American banks.
Posey, who represents all of Indian River County and parts of Brevard, Osceola and Polk counties, teamed up with New York Democrat Gregory Meeks, who is also on the committee, to keep the current procedures in place. Under the current policy, which defenders insist helps direct capital to American banks and leads to investment in the U.S., the banks do not report the interest. Nonresident aliens do not pay federal taxes on interest garnered through American banks.
On Friday, both Posey and Meeks, who represents parts of Queens, maintained the IRS proposal would lead to billions being pulled out of the American economy. They claim that the additional reports generated by the banks would lead to capital fleeing from America.
If youre an investor from a country with massive human rights violations or a corrupt regime, chances are you want your personal bank account information held in confidence, insisted Posey, who was first elected to Congress in 2008 after years of service in both chambers of the state Legislature. By imposing this new reporting requirement, those depositors will think twice about where they invest their money and cause many to invest elsewhere at a cost of billions of dollars to our economy. This is the wrong time to encourage individuals to withdraw billions from U.S. banks.
At a time when our economy is experiencing a nascent recovery, the last thing we want to do is discourage foreign investment in the United States, said Meeks, who was first elected to Congress in 1998. We must protect Americas reputation as the best place in the world to invest and do business.
This is not the first time the IRS has looked to change the reporting requirements for interest earned by nonresident aliens. It was tried back in 2001, but more than 100 members of Congress raised objections to the proposal.
Reach Kevin Derby at kderby@sunshinestatenews.com or a (850) 727-0859.
