November 22, 2000

International Taxes:
Center for Freedom and Prosperity
Formed to Protect Tax Competition

   A new group called the Center for Freedom and Prosperity (CF&P) vowed Nov. 20 to protect tax competition, financial privacy, and fiscal sovereignty.

     The group's immediate priority is leading the fight against the Organization for Economic Cooperation and Development's (OECD)  harmful tax competition initiative, it said in a news release. The OECD published earlier this year a long-awaited list of 35 tax havens and 47 preferential regimes across the world's industrialized countries that may pose problems of tax competition (124 DTR G-1, G-3, 6/27/00).

     The center's release said the OECD threatened the financial protectionism against nations with low-tax policies if they do not change  their laws to make it easier for Europe's welfare states to collect more revenue.

     House Majority Leader Dick Armey (R-Texas) said recently that OECD's efforts to eliminate harmful tax competition practices is  creating a "tax cartel," and the United States should reject its policy (179 DTR G-5, 9/14/00).

     Coalition for Tax Competition Formed

     The CF&P formed the Coalition for Tax Competition, which it said would protect competitive international markets. Working with  targeted governments, financial institutions, multinational businesses, and interested individuals, the coalition "will fight against  proposals that make it easier for politicians to prop up burdensome tax systems by undermining financial privacy and trampling on  fiscal sovereignty," the news release.

     "Tax competition and financial privacy should be celebrated, not persecuted," CF&P President Andrew Quinlan said.

     CF&P Board Chairman Daniel Mitchell compared the situation to a group of five gas stations in a town conspiring to raise prices.  "Why is it better for governments to get together and conspire to raise prices?" he said.

     "Europe's welfare state politicians resent the loss of jobs and capital to the United States," Mitchell added. "If the OECD succeeds  in bullying small nations in the Caribbean, they will then go after bigger targets such as Switzerland, Singapore, Ireland, and  America."

     The center, which was formed two months ago, will hold its first public briefing at the Caribbean/Latin America Action conference in Miami Dec. 7, where Quinlan and Mitchell will brief attendees on the threat to the region's financial services industry, the release said.

     Additional information may be obtained by calling (202) 285-0244 or accessing CF&P's World Wide Web site at  http://www.freedomandprosperity.org.

     Copyright © 2000 by The Bureau of National Affairs, Inc., Washington D.C.

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