Tuesday, July 31, 2001
Brace yourself for more bellyaching from Europeans about the United States' "isolationism."
This time, the Americans are guilty of the unthinkable act of refusing to tell other nations at what rate to levy taxes. The nerve.
Thanks in large part to American leadership, the 30-nation Organization for Economic Cooperation and Development has scaled back its efforts to force so-called "tax haven" countries and
territories to change their tax policies toward foreign investors. Many of these jurisdictions - such as the Bahamas and Monaco - have strict privacy laws and low taxes that encourage foreign investment.
Whereas today would have marked the deadline for the 35 jurisdictions to comply with an OECD initiative mandating that they tax foreigners at the same rate as their citizens, the organization has
backed off that order and the accompanying sanctions.
Kudos to the United States for opposing the misguided efforts to thuggishly squeeze out competition. It should fight any similar efforts at home or abroad.
Now the debate has shifted to whether countries and territories should be required to disclose financial information to an investor's home government.
Reasonable people have said this information should remain private until there is probable cause that an investor has deposited ill-gotten assets overseas. Treasury Secretary Paul O'Neill has
indicated he supports this idea.
But some argue that information exchange should be compulsory.
The Bush administration says it wants to balance the law enforcement concerns with its desire to protect privacy.
Our view is that it's always better to lean more toward protecting individual rights.
As the Heritage Foundation's Dan Mitchell pointed out to columnist Deroy Murdock, "If you repealed the Fourth, Fifth and Eighth Amendments, you could reduce crime, but it wouldn't be worth the
cost to individual liberty."
This is a fundamental idea that should guide U.S. negotiators.
Bush and company seem like they're headed on the right track on this one. If they reject the proposals to unneccesarily invade privacy, they'll prove once again that taking a stand on principle is to
be seen as leadership, not selfishness.