Executive Session

Floor Speech

BREAK IN TRANSCRIPT

Mr. PAUL. Mr. President, I call up my amendment No. 924.
BREAK IN TRANSCRIPT

Mr. PAUL. Mr. President, for several years now, I have been working on tax treaties that we have with other countries to try to protect Americans' privacy. I think it is very important that your personal information--what you buy with your credit card, what checks you write, and what you do with your bank account--is private. It is yours, and it is not to be sifted through or rummaged through by the government.

I am very, very concerned that, over time, particularly with technology, the IRS is gaining too much power at the push of a button to simply sift through our bank accounts looking for anomalies.

I think it is important that we protect Americans who live overseas. About 8 million Americans live overseas, and I think the vast majority of them are law-abiding citizens.

This debate has been going on for several years now. I first tried to engage the Obama administration in this. We had meeting after meeting but no meaningful engagement. Currently, we have been involved in negotiations with the Trump administration, which has been more open to discussions of how we protect Americans' privacies. Unfortunately, these negotiations were sabotaged by the Republican leader, who chose to bring these tax treaties forward at a time when we were in the middle of negotiations. This is very disappointing to me because I think we were at the point of actually achieving a deal that would protect the privacy of Americans. This process has been severely damaged and short-circuited by the Republican leader's choosing to push this forward and destroy the negotiations that we were having at the time.

When we look at these treaties, and we say, ``well, how could we make them better,'' there are ways that we could actually make them better. There are also ways that these treaties could have come up at any point in time in the past. No one Senator can really block legislation. The fact that this legislation hasn't come up for several years is really due to the fact that the Republican leader has failed to engage in any meaningful compromise or discussion over these.

The treaties are being brought up against my objections now. So they could have been brought up against my objections 2 years ago, 4 years ago, or 6 years ago. Really, the fault and the responsibility for the delay of these tax treaties lies squarely at the foot of the Republican leader, who has failed to engage on this subject and has, rather, chosen at the end just to rush them through without any meaningful debate.

Americans are constitutionally guaranteed to be free from unreasonable, suspicionless search--or at least we used to be. Today this Chamber begins consideration of four tax treaties, and each one of them contains provisions that would violate the fundamental right to be free from unreasonable searches.

To be sure, these treaties would bestow benefits to the United States and our trading partners, and those provisions have my support. In fact, I have said for years now that I support the gist of the treaties and that they try to prevent double taxation and they make it easier for companies to do business overseas, as well as to do business in our country. That is why I have said from the beginning: Let's negotiate a settlement. Let's try to put taxpayer protections into the treaties. But at every point we have been stymied.

I don't think the benefits of these treaties should come at the grave expense of violating the rights of every American with a foreign bank account, regardless of whether there is a shred of evidence that a crime has been committed.

These treaties make it easier for tax authorities, such as the IRS, to obtain an American citizen's bank deposit account information. Previously, the IRS could only obtain such information if it was necessary to address a tax dispute, but that is not the standard these treaties will keep. In the past, there had to be at least an accusation of wrongdoing, an accusation of fraud, or an accusation that a taxpayer was doing something against the law. These treaties, though, would allow the IRS--the government Agency that instills terror in every citizen it contacts, the government Agency that has almost limitless power to put anybody out of business--to obtain individual bank account records if that information is ``foreseeably relevant'' or ``may be relevant.''

Think for a minute what the standard is here. So if you happen to be an American who does business overseas, if it may be relevant, the government can look in your bank account. Really, the standard is ``may be relevant'' to the Tax Code, ``may be relevant'' to a question, instead of ``is relevant'' to an active investigation concerning wrongdoing by a taxpayer. I think this is a big mistake. It is going to lead to bulk transfer of information from countries back and forth.

We live in an era where some people leave one country or another, hoping to get away from totalitarianism and hoping to get away from the snooping authorities that may well debit their account or control their account based on their political behavior. I think it is a mistake to allow the information to be transferred back and forth without any kind of standard. The standard is ``foreseeably relevant,'' or ``may be relevant.'' What kind of standard is that?

Historically, the standard required, at the very least, is an accusation of a crime. It will no longer require that. Will it require suspicion of a crime? No, it will require anything the government asks that it may be relevant to the treaty, that it may be relevant to the Tax Code, which is basically no standard at all. No American overseas will have any kind of protection of their privacy.

Some recent international court decisions have provided an idea as to what meets this new standard. According to the Swiss Federal Supreme Court, under the new standard of these new tax treaties and the ``foreseeably relevant'' standard, an information request will only be denied if the link between the requested data and the information is improbable. No consideration is necessary as to whether there is reasonable suspicion of a crime. People can go after the information, basically, based on no accusation of a crime or no suspicion of a crime. It will be a fishing expedition.

Perhaps we should thank the Swiss Federal Supreme Court for effectively telling us what we already knew, that the ``foreseeably relevant'' standard is really no standard at all.

At a time when the United States is over $22 trillion in debt and running annual trillion-dollar deficits, these treaties would empower the IRS to obtain sensitive bank account information under the weakest of pretenses. In short, the information is exchanged with no questions asked, no reasonable suspicion, and no due process in an effort to swell the coffers of the U.S. Treasury.

I am outraged by this. The Senate should be outraged, and the American people should be outraged that their liberties are so cavalierly cast aside to accommodate the IRS's perpetual search for more taxpayers to shake down.

My amendment to the treaties would end bulk exchanges of financial records by simply mandating that the United States and our treaty partners would exchange information only if an identified individual is subject to an individual investigation related to the enforcement of the Tax Code. I am not against going after people not paying their taxes, but I am against going after the 8 million Americans who live overseas and are just trying to abide by the laws and just trying to earn a living.

While those who have evaded their tax obligations must be held to account, the power to search and seize is not absolute in the United States or in any free country. A government dedicated to securing the blessings of liberty does not allow the IRS to rummage through our bank accounts hoping to find a crime.

Obtaining the deposit account information of an American should be done on an individualized basis without resorting to indiscriminate sweeps of sensitive information gathering.

I urge every Senator to stand up for the Fourth Amendment rights of all Americans and to support my amendment.

My amendment would simply do this. It would put a standard into the treaties that says that there has to be suspicion. You have to individualize an investigation. You can't push a button and search through 8 million Americans' bank records overseas. If we allow this to go without personal privacy protections, we are setting ourselves up for a dystopian nightmare, where the government looks at every transaction, every purchase, and everything we do in our lives. It is a big mistake to let this go.

There is no reason why this couldn't be corrected.

I have spoken to the countries involved, and they have assured me that there is not a problem at all with making these amendment changes to the treaties. Yet they have fallen on deaf ears.

It is a sad day for Americans taxpayers and a sad day for privacy that these tax treaties are being rushed through. I strongly object and hope other Senators will consider voting for taxpayer privacy.

BREAK IN TRANSCRIPT

Mr. PAUL. I call up my amendment No. 921.
BREAK IN TRANSCRIPT

Mr. PAUL. Madam President, I am offering a reservation to these treaties that would maximize the benefit for individuals and businesses that are impacted by these tax provisions.

My proposed reservation would establish only for the United States-- and only for our tax purposes--an effective date of January 1, 2019. By entering into these treaties, the United States and our partners are committing to the same set of tax rules and solving the problems of double taxation that plague businesses that operate in several countries.

Senate debate on the merits of these treaties has taken many years, and there is no reason to punish American companies that paid their foreign taxes but then were double-taxed by the IRS due to the lack of a ratified treaty.

As I have said many times, I support the benefit of these treaties. I wish we added privacy protections, but I do support the benefits of avoiding double taxation.

I also support making whole those who have been double-taxed, and I think it is the right thing to do to backdate these to the beginning of the year. My proposed reservation would grant these companies and the IRS the additional benefit of having a uniform tax for 2019.

To give an example of a company in my State that would benefit, North American Stainless cannot pay dividends without being subject to double taxation. If we were to make this retroactive, we would not punish this company in my State. It is disappointing to me that the senior Senator from Kentucky led the opposition to this amendment because it would stand to greatly benefit a Kentucky company. It also would stand to greatly benefit many companies around the country if we were simply to make this retroactive.

We talked to the countries involved, and there is not one country that expressed any reservation about this. It is with great disappointment that I have to oppose the senior Senator from Kentucky, who is opposing this amendment and rallying those in the body to prevent this from being retroactive. This would in no way slow down the treaties, and it is inappropriately said by some that it would. These treaties would go through with flying colors, and the reservation would apply only to our country.

I hope those who are thinking about how to vote on this will consider voting to make these treaties start in January 1 of this year.

BREAK IN TRANSCRIPT

Source