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Center for Freedom and Prosperity's Weekly Update 2) The OECD and EU Attack Tax Competition, Financial Privacy and Fiscal Sovereignty 3) Proposed IRS Regulation on Requiring U.S. Financial Institutions to Report Interest Income to Foreign Governments 4) UN Report Attacks Tax Competition and Fiscal Sovereignty 5) Two other issues the Center is tracking 1. Fighting against Fiscal Protectionism: Stopping the attack on re-insurance 2. Turning Lemons into Lemonade: Dumping worldwide taxation
Last Friday, we completed our 37th meeting of the week on Capitol Hill. We have another 40-plus meetings scheduled this week, and we intend to meet with more than 150 offices in the next month. We are using this opportunity to educate staff on the OECD/EU/UN tax harmonization agendas and the adverse impact of these schemes on the U.S. economy. We are also discussing the misguided IRS proposal to require the reporting of bank deposit interest paid to nonresident aliens and the need for America to dump worldwide taxation in response to the upcoming WTO decision on America's tax treatment of export income. This week we will be releasing an important paper on the relationship – or lack thereof – between low-tax jurisdictions and money laundering. We also will have important news from at least one senior lawmaker. These issues will be covered in an update later this week. Because this is the first update of the year, we want to take this opportunity to review the key issues and provide links to material that explains why the Center is fighting to preserve jurisdictional tax competition.
2) The OECD and EU Attack Tax Competition, Financial Privacy and Fiscal Sovereignty. CFP has been leading the international fight to stop the OECD and EU. We have been quite successful in educating Washington lawmakers and policy makers. Many news sources have credited us with bringing the importance of this issue to the attention of the Bush Administration. We like to think that it was a collective effort by dozens of free-market groups around the world, the seven-dozen lawmakers who sent letters to the Administration, and the leadership of many in the targeted jurisdictions that helped bring this issue to the forefront. Tax Competition Primer: Dozens of Congressional Letters on the OECD and EU Tax Harmonization and Information Exchange Schemes CFP Foundation's Report "The Adverse Impact of Tax Harmonization and Information Exchange on the U.S. Economy" Marshall Langer's "Who are the Real Tax Havens" Nobel Laureates Milton Friedman and James Buchanan letter to President Bush -- with more than 200 economists Bruce Zagaris explains US would be targeted if OECD initiative succeeds. . . December 21, 2001, CFP Strategic Memorandum: A Christmas present from Europe – Delay in the EU Savings Tax Directive December 4, 2001, CFP Strategic Memorandum: Undermining the EU Savings Tax Directive CFP & CFPF Strategic Memorandums CFP and CFPF Press Releases
3) Proposed IRS Regulation on Requiring U.S. Financial Institutions to Report Interest Income to Foreign Governments This proposed regulation would lead to capital flight and have an adverse impact on the US economy. CFP has been leading the fight against the regulation. We testified before the IRS and led delegations to Capitol Hill and the Administration. We continue to ask the Bush Administration to formally withdraw this last-minute Clinton goodbye kiss to the European Union. Why do we care? U.S. banks and financial institutions benefit greatly from the deposits of nonresident aliens. These deposits, in turn, help every American by helping to create jobs, finance small business loans and improve the general welfare of all. For decades, United States lawmakers have understood the importance of attracting capital to America, which is why Congress has chosen not to tax the interest paid on bank deposits of nonresident aliens and not to require the reporting of this deposit income to foreign governments. Unfortunately, despite the clear intent of Congress, the Internal Revenue Service is seeking to require the reporting of bank deposit interest paid to nonresident aliens. This information, according to the proposed regulation, would then be turned over to foreign tax collectors. If this happens, deposits will leave U.S. banks and land in Hong Kong, Singapore, Luxembourg and others. See links below: Dump the IRS NRA Regulation Page The Heritage Foundation Executive Memorandum: Proposed IRS Regulation Flouts Congress and Would Harm the Economy Quinlan's full testimony before the IRS: Mitchell's full testimony before the IRS: CFP and 39 other groups letter to the Senate CFP and 26 of the largest U.S. Think Tanks and Anti-Tax Groups Asks OMB to Review Clinton-Era Bank Deposit Interest Regulation: Dan Mitchell's first op-ed: November 12, 2001, Investor's Business Daily, By Daniel J. Mitchell, Europe's Vassal: IRS Reg Exposes Foreign Investors To Tax Fleecing December 20, 2001, The Washington Times, by Veronique de Rugy, IRS global deposit overreach? Marshall J. Langer: Proposed Interest Reporting Regulations Could Cause Massive Outflow of Funds: Florida Congressional Delegation Speaks Out Against Proposed IRS Regulation
4) UN Report Attacks Tax Competition and Fiscal Sovereignty The United Nations (UN) issued a report attacking tax competition and fiscal sovereignty. There are four main recommendations in the report - an international tax organization, global taxes, emigrant taxation, and a back-door form of tax harmonization (information exchange). Every one of these initiatives would undermine individual liberty and encourage statist economic policy. Like the Organization for Economic Cooperation and Development (OECD) and the European Union (EU), both of which are pursuing similar agendas, the UN seeks to prop up inefficient welfare states by making it difficult for taxpayers to escape oppressive tax systems. Leaders of all low-tax nations, particularly the United States, should block the UN's radical scheme. Links below: CFP Foundation's Study: United Nations Seeks Global Tax Authority Dan Mitchell's "A one-world taxing authority?" The Prosperity Institute's Study: The U.N. High Level Panel on Financing for Development Recommends Making Orwell's Big Brother Real Bruce Zagaris' Report: U.N. Report Calls for New Spirituality: The Creation of Two Organizations to Aid International Tax Enforcement January 9, 2002, Fox-News report: Critics Slam Proposed U.N. Tax Authority
5) Two other issues the Center is tracking 1. Fighting against Fiscal Protectionism: Stopping the attack on re-insurance companies from low-tax jurisdictions. Dan Mitchell's Heritage study attacking the Johnson-Neal legislation. Dan Mitchell's Investor's Business Daily editorial 2. Turning Lemons into Lemonade: Dumping worldwide taxation in response to the WTO. Dan Mitchell's Washington Times editorial
I hope everyone is having a great 2002 and I wish you a Happy New Year. Best regards, Andrew Quinlan __________________________ Did you like what you just read? If so, consider supporting to the Center for Freedom and Prosperity. For more information please see: Do you have a friend who might be interested in our e-mails? If so, forward it to them, or have them join our list at:
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