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Center for Freedom and Prosperity Foundation For Immediate Release Coalition for Tax Competition Urges Treasury to Reject Senate Proposals that Penalize Americans Who Invest in Nations with Competitive Tax Regimes (Washington, DC, Tuesday, March 20, 2007) – The Center for Freedom and Prosperity Foundation, joined by 44 of the country's largest and most influential free-market groups, has sent a letter urging Treasury Secretary Henry Paulson to "protect America's self-interest" and oppose proposals by Senator Byron Dorgan (D-ND) and Senator Carl Levin (D-MI) that "seek to thwart tax competition and penalize good tax policy in other jurisdictions." The letter from the Coalition for Tax Competition states, "Senator Byron Dorgan of North Dakota has proposed S. 396, a bill which targets American companies operating in selected low-tax jurisdictions and strips away their ability to postpone the imposition of a second layer of tax on their foreign-source income. Senator Carl Levin of Michigan has proposed S. 681, a bill which imposes a wide range of taxes, regulations, and penalties on American taxpayers operating in selected low-tax jurisdictions. … Both of these pieces of legislation are deeply flawed. They share a common premise that the U.S. government should adopt an adversarial position against jurisdictions with pro-growth tax policy." The letter details three flaws with the two proposals.
"Senators Dorgan and Levin should be ashamed for their discriminatory attacks on less economically developed countries. American lawmakers should encourage more nations in the developing world to adopt pro-growth tax regimes, not penalize them," stated Andrew F. Quinlan of the Center for Freedom and Prosperity Foundation . The 45 signers of the letter encourage Secretary Paulson and others to reform he United States' tax code so it is more competitive rather than penalize Americans for investing in developing nations with competitive tax systems. Additional comments on the Dorgan and Levin proposals: Dan Mitchell of the Cato Institute: "Senators Dorgan and Levin have managed to combine the worst of all worlds. Their bills hurt U.S. competitiveness, discriminate against developing nations, and violate America's WTO obligations." Veronique de Rugy of the American Enterprise Institute: "Rather than blacklisting nations with better tax law, Senators Dorgan and Levin should work to make America's tax system more competitive – even if it means giving up some of their power to redistribute money to favored interest groups." Grover Norquist of Americans for Tax Reform: "Instead of behaving like French politicians and trying to blacklist nations with better tax policy, Senators Dorgan and Levin should lower tax rates to encourage more jobs and investment in America." John Berthoud of theNational Taxpayers Union: "American jobs will be lost and exports hurt if Senators Dorgan and Levin succeed in making it harder for American companies to compete in global markets." Representatives of the following organization signed the Coalition letter: Center for Freedom and Prosperity Foundation; American Enterprise Institute; Americans for Tax Reform; National Taxpayers Union; U.S. Chamber of Commerce; FreedomWorks; Club for Growth; Competitive Enterprise Institute; Small Business & Entrepreneurship Council; Council for Citizens Against Government Waste; The Heritage Foundation; American Conservative Union; 60 Plus Association; Alabama Policy Institute; Alliance for Worker Freedom; American Legislative Exchange Council; American Shareholders Association; Americans for Prosperity; Americans for the Preservation of Liberty; Arizona Free Enterprise Club; Capital Research Center; Center for Individual Freedom; Citizen Outreach Project; Citizens for Limited Taxation (MA); Coalition to Protect Free Markets; The Free Enterprise Fund; Independent Women's Forum; Institute for Liberty; Institute for Policy Innovation; Institute for Research on the Economics of Taxation; Iowa Wednesday Group; James Madison Institute; Let Freedom Ring; Maryland Taxpayers Association; National Center for Public Policy Research; National Tax Limitation Committee; The Nevada Policy Research Institute; New York Tax Reform Organization; Oregon Taxpayers United; Pacific Research Institute; Sovereign Society; Taxpayers League of Minnesota; United Californians for Tax Reform; United Seniors Association; and, Virginia Institute for Public Policy. Link to the full text of the Coalition for Tax Competition Letter: PDF Version of Coalition Letter: __________________________________ Text of Letter and List of Signers… March 19, 2007 The Honorable Henry M. Paulson, Jr. Dear Secretary Paulson, We are writing to express our concern about two Senate proposals that would undermine American competitiveness, discriminate against developing nations, and compromise the U.S. commitment to free trade in financial services. Senator Byron Dorgan of North Dakota has proposed S. 396, a bill which targets American companies operating in selected low-tax jurisdictions and strips away their ability to postpone the imposition of a second layer of tax on their foreign-source income. Senator Carl Levin of Michigan has proposed S. 681, a bill which imposes a wide range of taxes, regulations, and penalties on American taxpayers operating in selected low-tax jurisdictions. Both of these pieces of legislation are deeply flawed. They share a common premise that the U.S. government should adopt an adversarial position against jurisdictions with pro-growth tax policy. Specific flaws include:
We urge you to protect America's self-interest and oppose proposals that seek to thwart tax competition and penalize good tax policy in other jurisdictions. The United States is not a decrepit, high-tax European welfare state, yet this legislation is akin to the noxious tax harmonization schemes concocted in various European nations. If some lawmakers are concerned that American taxpayers are shifting economic activity to low-tax jurisdictions because of better tax law, they should respond by fixing some of the laws in the internal revenue code, many of which were identified by the President's Advisory Panel on Tax Reform. We look forward to working with you and hope that you will resist anti-competitive, discriminatory, and protectionist proposals that are contrary to good economic policy. Sincerely, Andrew F. Quinlan ~ President, Center for Freedom and Prosperity Foundation Contact Information: ### __________________________ Center for Freedom and Prosperity Foundation |
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