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[PDF Version]
February 7, 2002
Mr. Romano Prodi
President of the Commission
European Commission
Rue de la Loi 200
1049 Brussels
Belgium
Dear Mr. President:
The European Union's proposed Savings Tax Directive is contingent on participation of six non-EU nations, including the United States. Yet America is a capital-inflow nation, in large part because our
tax burden is much lower than the average tax burden in Europe. As such, it is difficult to understand why members of Congress should support a scheme that would undermine America's competitive advantage in the
global economy.
To assist members of Congress in analyzing this issue, I am hoping you can answer a few simple questions:
- Do you think sovereign nations have the right to determine how income earned inside their borders is taxed?
- Have EU member nations considered tax rate reductions and tax reforms as an alternative way of stopping capital flight?
- Even if the six non-EU nations participate, is the EU's Savings Tax Directive feasible? Won't savings simply gravitate to other jurisdictions (in Asia and elsewhere) outside of the proposed
cartel?
- The Savings Tax Directive assumes that there should be multiple taxation of income that is saved and invested. But if a nation reforms its tax system to eliminate double-taxation, would that
nation still be expected to collect data on savings even if such information was not needed for domestic purposes?
- Should taxpayers have due-process legal protections, such as the right to contest the release of confidential financial information?
Thank you for providing assistance as Congress considers this important issue. I look forward to your prompt and specific response to these questions.
Sincerely,
Pete Sessions
Member of Congress
cc:
The Honorable Paul O'Neill, United States Department of the Treasury Secretary
The Honorable Trent Lott, Senate Majority Leader
The Honorable Richard Armey, House Majority Leader
The Honorable Bill Thomas, House Ways & Means Chairman
The Honorable Rockwell Schnabel, United States Ambassador to the European Union
The Honorable Günter Burghardt, European Union Ambassador to the United States
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