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Center for
Freedom and Prosperity
 P.O. Box 10882
Alexandria, Virginia 22310-9998
Phone: 202-285-0244
Fax: 208-728-9639
                                            

Investor's Business Daily

May 6, 2002

Editorial

Statists' New Ploy

Taxes: The nearly universal drive for more revenues never sleeps. Statists find them so delicious that they're even willing to force higher taxation on other countries. Unless, of course, the eternally vigilant stop them. But the eager tax collectors have been energized by our war on terrorism, especially its financial links to violent groups. They see a way to expand the state's reach and its coffers. Yet if wrongly handled, or handled by the wrong men, these financial assaults could reveal private data that will be used to force more money out of taxpayers who have chosen to escape the high taxes imposed by many nations for the promise of greater economic liberty elsewhere. By "them," we mean the human gears of the bureaucratic machines such as the European Union, the Organization for Economic Cooperation and Development and the U.N. Just last month, the OECD "blacklisted seven low-tax nations," says Mack Mattingly, a former Georgia senator, "by imposing a withholding tax on funds transfers in order to get them to voluntarily agree to information exchange." That information so coveted by the OECD is personal financial data. In a report for the Prosperity Institute, Mattingly warned of "a global tax police force that will have unfettered access to an individual's financial data. They see financial privacy as a collateral casualty on the campaign for tax harmonization. "When illusive capital flows can be tracked and taxed, when no dollar of wealth or income can escape the clutches of tax collectors, the dream of tax harmonization can be realized. And the OECD sees the renewed interest in information exchange as an unintended benefit of America's financial war on terrorism," Mattingly said. Tax harmonization is important to multinational enterprises such as the U.N., OECD and EU. They see injustice when high-tax states, France for instance, lose out economically to low-tax states such as Monaco. For obvious reasons, the low-tax states attract more investment, business, skilled workers and entrepreneurs, and their economies flourish. The statist answer is never the rational course: to harmonize tax rates at the lowest possible level. No, to them it's better to make every nation's citizens see their incomes drained away at high rates to support government programs. Even worse, if someone emigrates to a low-tax nation from a tax-hungry one, the statists think it's only fair to follow that emigre's books and tax him at the tax rate he fled. And in the end, the economy be hanged. Competition works in marketplaces; it'll work among nations, too - if the statists get out of the way.

 

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