https://www.conservativereview.com/commentary/2016/04/the-most-dangerous-treaties-you-know-nothing-aboutWhen you hear the phrase “tax treaties,” your first response (besides yawning) would be to assume that, out of all the treaties the United States is involved in, these would be the most harmless. Generally, you’d be right.
When we talk about tax treaties, we usually mean agreements between countries to ease excessive taxation (usually double taxation) while promoting cooperation in tax compliance.
But pending in the Senate right now are two tax treaties that are particularly dangerous to privacy, to U.S. sovereignty, and to the security of individuals and human rights.
Most U.S. taxpayers would probably oppose their tax dollars being used to enforce Russia’s tax laws; I know I’m certainly one of them.
One of the first people to notice these treaties was the tax expert David Burton at the Heritage Foundation, a conservative think-tank. Burton, buried under a plethora of books and papers, wrote a white paper that should be studied by every Senator, called “Two Little Known Tax Treaties Will Lead to Substantially More Identity Theft, Crime, Industrial Espionage, and Suppression of Political Dissidents.”
Burton calls out the treaties for what they actually are: an attempt by the U.S. and participating countries to engage in an obsessive quest to track down every taxpayer with a foreign interest or bank account. These treaties effectively become a game of “show me” – “you show me your data, I’ll show you mine,” where data on private citizens is swapped between countries without the individual’s knowledge or consent and without a warrant or the allegation of wrongdoing.
Sharing Tax Data: Identity Theft, Crime, and Industrial EspionageIf ratified by the Senate, these tax treaties would commit the U.S. government to sharing private tax data with other nations – specifically, information about foreign persons or businesses with bank accounts in the U.S. This not only presents unique risks to foreigners, it puts U.S. taxpayers and American businesses in harm’s way, too.
How? Because these treaties would allow other nations to request – and receive – confidential data on American businesses. For example, think of the major U.S. industrial companies that operate overseas. Many U.S. businesses make their living on their confidential blueprints, procedures and business models. If passed, these treaties would allow the host nation to demand and receive detailed data on these companies. The U.S. would have no control over how that data might be used, thereby increasing the threat of sabotage or industrial espionage to those American companies operating abroad.
The accumulation of data also puts residents at serious risk of identity theft. It is no secret that the U.S. government has a poor record of securing private data. Take the Office of Personnel Management (OPM) hack for example. In June 2015, the federal agency hack exposed the private data of more than 21 million people. That hack also exposed the fingerprint identification of 6 million people. The government is not very good at protecting the data they already manage, and yet these treaties would give the federal government even more authority to stockpile sensitive information.
But it’s not even the U.S. that is the true concern. Compared to other nations, the U.S. has sterling data protection. But who’s to say that the information on U.S. taxpayers will be safe if it’s shared with countries like, say, Kazakhstan?
Suppression of Political Dissent – at Home and AbroadIn most cases, tax treaties are between two parties. For example, the Swiss tax treaty is between the U.S. and Switzerland. In that instance, the identity and character of our partner is well known. These treaties, however operate among all countries that are party to the Organization for Economic Co-Operation and Development, among many others.
That means the U.S. could be forced to provide private financial data to governments like China, Russia, Nigeria, Kazakhstan, and Columbia. These are just a few examples of nations that are either hostile to the U.S. or corrupt – or both – and furthermore, have terrible track records when it comes to human rights.
Signing these treaties could result in a direct increase of physical harm to individuals. Burton highlights these risks:
The most serious overall risk is to foreigners who have accounts in the West and are political opponents of authoritarian governments and members of persecuted religious or ethnic minorities. The financial information about these dissidents, opposition groups, and minorities will almost certainly be used inappropriately by authoritarian governments.
Moreover, these treaties would be putting the U.S. in a position to enforce the tax laws of other countries – which include a host of laws that most Americans would find reprehensible.
As Burton notes, “This new obligation will impose costs on the U.S. government that only aid foreign states in collecting their own taxes.”
Most U.S. taxpayers would probably oppose their tax dollars being used to enforce Russia’s tax laws; I know I’m certainly one of them.
At a Minimum, More Transparency Is RequiredThese tax treaties are used as an apparatus for governments to share private information. The sensitivity of this issue needs closer examination, and taxpayers deserve more transparency in how these treaties are being used and for what purpose.
More importantly, however, these treaties are antithetical to the American way of life. America promotes freedom by safeguarding the constitutional protections guaranteed by the Fourth Amendment. These important protections should limit a government’s access to a person’s private information. A person’s financial privacy is among the most important to protect from government.
It is this data that peeks most intimately into an individual’s life.
An individual’s finances tell a person’s life story. It shows what a person buys, the books they read, where they travel, the medicines they take and doctors they visit. It reveals a person’s hobbies, what a person eats or anything they ever bought online.
Delicate information like this is crucial to protect. It must be a priority before we head off on a clueless journey to find taxpayers around the world.
