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Freedom and Prosperity
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CF&P E-Mail Update,  February 2, 2004

Center for Freedom and Prosperity's E-mail Update

1) Washington Update

2) CF&P Strategic Memo: London Meeting of OECD Sub-Group

3) Dan Mitchell to Speak at London Tax Competition Seminar ~ February 3, 2004

4) Three Years is Enough: Coalition Urges Withdrawal of Clinton-O'Neill IRS Regulation

5) Chairman Manzullo: Time to Bury IRS Proposed Information Sharing Regulation

6) $2.3 Trillion of Foreign Investments in U.S. Financial Institutions

7) Dan Mitchell: The Economics of Tax Competition: Harmonization vs. Liberalization

8) The WSJ's comments on the 2004 Index of Economic Freedom, applauds importance of tax competition

9) Dan Mitchell:  Job Creation and the Taxation of Foreign-Source Income

10) UN Joins the OECD and the EU, Attacks Tax Competition

11) Courts Re-Confirm That US Has No Obligation To Enforce Foreign Tax Law

12) WSJ: Escape From Vermont

13) Cato has just released a new study entitled "The Republican Spending Explosion."

14) Richard Rahn: Markets and Monopolies

15) Sir Ronald Sanders: Caribbean's financial sector remains under serious threat

16) EU admits Europe falling behind US on economy

17) CF&P Clips

 

1) Washington Update

The Organization for Economic Co-operation and Development (OECD) is meeting with low-tax jurisdictions in London to discuss "level playing field" issues from February3rd to the 5th.  In conjunction with the OECD meeting, Dan Mitchell of the Heritage Foundation will be the featured speaker at a Tax Competition Seminar in London sponsored by The Institute of Economic Affairs and The TaxPayers' Alliance (see information below). I could not make the London seminar since I have just returned from a trip, however, CF&P just released a Strategic Memo (see below) that shares our views and strategies on the upcoming OECD meeting. If you recall, our widely attended briefing at the OECD's Global Forum on International Tax Policy in Ottawa last October was viewed by many as an important event in the eventual failure of the Ottawa round.

Also, the Center just completed a two week Capitol Hill Blitz. We had private meetings with more than 50 Hill offices and we briefed a few Members of Congress personally.  We discussed several of our key issues including the OECD/EU/UN tax harmonization schemes, the IRS information reporting regulation, and the need for reform of America's treatment of foreign-source income.  We feel that we made some progress and we plan on setting up some more meetings in the near future.

The update below is full of useful information and brings you up to date on many of the issues we are tracking. If you have any question on any of these topics, please don't hesitate to contact me.  Thank you.

Regards, AQ

 

2) CF&P Strategic Memo: London Meeting of OECD Sub-Group

[Excerpt]

Beginning February 3, representatives of high-tax governments and low-tax jurisdictions will meet in London as part of the Organization for Economic Cooperation and Development's (OECD) "level playing field" sub-group. This meeting is a continuation of the Ottawa conference, and is part of the OECD's ongoing (and almost entirely futile) effort to convince low-tax jurisdictions that they should agree to serve as fiscal colonies for high-tax nations.

The fundamental issue is whether low-tax jurisdictions should agree to emasculate their privacy laws and surrender their fiscal sovereignty so that high-tax nations can more easily enforce their bad tax laws – including taxation of income earned outside their borders. Using the threat of protectionism, the OECD convinced many so-called tax havens to sign "commitment letters" indicating that they would take the aforementioned steps, but the low-tax jurisdictions simultaneously stated that the letters were not binding unless all OECD nations agreed to abide by the same misguided rules. This "level playing field" requirement has created a stalemate since a number of nations – including OECD members such as the United States, the United Kingdom, Luxembourg, and Switzerland – are "tax havens" according to the OECD's own definition.

The OECD hoped this problem would be solved by the adoption of the European Union Savings Tax Directive. At one point, this tax harmonization scheme would have required all EU nations – along with six non-EU nations including Switzerland and the United States – to automatically collect and share information about nonresident investors. Had that proposal been implemented, low-tax jurisdictions would have faced tremendous pressure to comply with OECD demands (even though the level-playing-field requirement still would not be satisfied because certain tax havens in Asia and elsewhere would have been exempt).

The EU directive became a moot issue, though, when the Brussels-based bureaucracy was forced to eviscerate the proposal (see CF&P Foundation Prosperitas, Vol. III, Issue IV1 for a complete analysis). Several OECD nations have been excused from any requirement to share information, meaning that the so-called level playing field does not exist and low-tax jurisdictions are not obliged to act as deputy tax collectors for high-tax nations.

So what, then, is the purpose of the London sub-group meeting? [Link to full memo below:]

February 2, 2004, CF&P Strategic Memorandum, by Dan Mitchell, London Meeting of OECD Sub-Group
http://www.freedomandprosperity.org/memos/m02-02-04/m02-02-04.shtml

Link to October 2003, CF&P Foundation Prosperitas: The Level Playing Field: Misguided and Non-Existent
http://www.freedomandprosperity.org/Papers/lpf/lpf.shtml

OECD "Draft Terms of Reference"
http://www.freedomandprosperity.org/memos/m02-02-04/oecd-draftterms.pdf

 

3) Dan Mitchell to Speak at London Tax Competition Seminar ~ February 3, 2004

Dan Mitchell of the Heritage Foundation will be in London from Monday, February 2nd through Wednesday February 4th.  Dr. Mitchell will be speaking at a tax competition seminar on Tuesday, sponsored by The Institute of Economic Affairs and The TaxPayers' Alliance.

Information:

Tax Harmonisation Versus Tax Competition: Which Promotes Prosperity?
Tuesday 3rd February 2004
10.30am until 11.30am
(coffee and tea served from 10.00am)
at: 2 Lord North Street, London SW1

Link to more information on event:
http://www.freedomandprosperity.org/iea2.pdf

 

4) Three Years is Enough: Coalition Urges Withdrawal of Clinton-O'Neill IRS Regulation

The Center for Freedom and Prosperity, joined by more than 30 of the country's largest and most influential free-market groups, urged Treasury Secretary John Snow to "permanently" withdraw the proposed IRS regulation to require the reporting of bank deposit interest paid to nonresident aliens (REG-133254-02). In the letter sent to the Treasury Secretary, the members of the Coalition for Tax Competition stated, "This initiative is not needed to enforce US tax law and it will undermine our economy's performance by causing capital to flee the American banking system…For more than 80 years, Congress has sought to attract capital to the US economy by neither taxing nonresident alien bank deposit interest nor requiring the reporting of such income. The IRS does not have the right to unilaterally change this law, so the regulation is a clear violation of congressional intent." {Link to full letter and Press Release below:]

Press Release:
http://www.freedomandprosperity.org/press/p01-26-04/p01-26-04.shtml

Link to the full text of the Coalition for Tax Competition Letter:
http://www.freedomandprosperity.org/ltr/ctc6/ctc6.shtml

PDF Version of Coalition Letter:
http://www.freedomandprosperity.org/ltr/ctc6/ctc6.pdf

CFP's dedicated web page on withdrawing the proposed IRS regulation:
http://www.freedomandprosperity.org/update/irsreg/irsreg.shtml

Complete List of Opposition to Reg:
http://www.freedomandprosperity.org/against-irsreg.pdf

Articles

January 27, 2004, Tax-News.com, by Mike Godfrey, CFP Urges Withdrawal Of Clinton-Era Tax Regulation
http://www.tax-news.com/asp/story/story.asp?storyname=14862

January 27, 2004, Bureau of National Affairs, By Katherine M. Stimmel, Free Market Interest Groups Urge Treasury To Withdraw Alien Interest Reporting Rules
     See
www.bna.com for full article

January 6, 2004, Tax-News.com, by Leroy Baker, Foreign Investors Will Not Be Deterred By Interest Reporting Rules, Says Treasury
http://www.lowtax.net/asp/story/frontstory.asp?storyname=14657

 

5) House Small Business Committee Chairman Manzullo: Time to Bury IRS Proposed Information Sharing Regulation

Chairman Manzullo:

"This week marks the dark, three-year anniversary of an Internal Revenue Service attempt to require American financial institutions to conduct special reporting of interest paid to nonresident aliens (REG-133254-02). The Treasury Department reports that foreigners have placed more than $2 trillion in American financial institutions. Only a portion of this money is directly affected by the IRS regulation, but it is foolish to push a proposal that jeopardizes US competitiveness as capital quickly evaporates from our banks and will instead be deposited in other foreign banks if this rule becomes law.

"This costly and burdensome regulation is overstepping the IRS's authority. Collecting this information for tax purposes goes against Congressional intent, when Congress 80 years ago agreed not to report and tax accounts held by non-resident aliens

"As Chairman of the Small Business Committee, I call on the IRS to withdraw this burdensome regulation and bury it before it sucks out capital needed for growing this economy."

Link to full release:
http://www.freedomandprosperity.org/congress/manzullo/manzullo.shtml

January 28, 2004, Tax-News.com, by Mike Godfrey, Interest Reporting Proposal Will Damage US Banking Sector Says Lawmaker
http://www.tax-news.com/asp/story/story.asp?storyname=14886

 

6) $2.3 Trillion of Foreign Investments in U.S. Financial Institutions

New Treasury data shows more than $2 trillion of foreign funds in U.S. banks - including nearly $900 billion from Caribbean. 

January 2004, U.S. Treasury International Capital Reporting System, Chart CM-A -- U.S. Liabilities to Foreigners Reported by U.S. Banks, Brokers and Dealers with Respect to Selected Countries
http://www.treas.gov/tic/exhibita.pdf

 

7) Dan Mitchell: The Economics of Tax Competition: Harmonization vs. Liberalization

Great primer on why tax competition is so important.

[Excerpt]

Tax competition exists when people can reduce tax burdens by shifting capital and/or labor from high-tax jurisdictions to low-tax jurisdictions. This migration disciplines profligate governments and rewards nations that lower tax rates and engage in pro-growth tax reform.

Like other forms of competition, fiscal rivalry generates positive results. People get to keep more of the money they earn, and economic performance is enhanced because of lower tax rates on work, saving, and investment. The capital mobility that defines tax competition also protects against government abuses. People can guard against corruption and protect their human rights more effectively when they know that they and/or their capital can flee across national borders.

The thought of losing sources of tax revenue scares government officials from high-tax nations, who vociferously condemn tax competition and would like to see it reduced or eliminated. Working through international bureaucracies like the European Union (EU), the United Nations (UN), and the Organisation for Economic Co-operation and Development (OECD), high-tax governments are promoting various tax harmonization schemes to inhibit the flow of jobs and capital from high-tax jurisdictions to low-tax jurisdictions.

These proposals are fundamentally inconsistent with good tax policy. Tax harmonization means higher tax rates, but it also means discriminatory and destructive double taxation of income that is saved and invested. It also means extraterritorial taxation since most tax harmonization schemes are designed to help governments tax economic activity outside their borders.

Tax competition should be celebrated, not persecuted. It is a powerful force for economic liberalization that has helped promote good tax policy in countries around the world. Even OECD economists have admitted that "the ability to choose the location of economic activity offsets shortcomings in government budgeting processes, limiting a tendency to spend and tax excessively."

2004 Index of Economic Freedom:  Chapter 2, by Daniel J. Mitchell, The Economics of Tax Competition: Harmonization vs. Liberalization
http://www.heritage.org/research/features/index/ChapterPDFs/chapter2.HTML
http://www.heritage.org/research/features/index/ChapterPDFs/chapter2.pdf

Here is the link to the full Index:
http://www.heritage.org/research/features/index/

 

8) The Wall Street Journal's comments on the 2004 Index of Economic Freedom, applauds importance of tax competition

[Excerpt]

In fact, countries moving down the road map toward economic freedom have higher growth rates. As long as they keep progressing along the road map, their growth rate tends to be above the average for all countries. The faster they move (the greater the improvement in score), the higher the growth rate. Once countries decide to stop by the roadside or to retrace their steps, growth plummets. So the important message to the countries of the world is that they can help themselves just by starting to adopt economic freedom. The more economic freedom they adopt, the faster they grow or the longer they have superior growth. More growth in turn means that the average level of prosperity is increasing.

The two main front chapters in this year's Index elaborate further on the theme of how the 10 steps work. In terms of the fiscal burden, it is clear that marginal tax rates are an important potential barrier to economic freedom. In Chapter 2, Daniel J. Mitchell contrasts two tax movements among European countries: tax harmonization, which "eliminate[s] fiscal competition, much as a price-fixing agreement among gas stations destroys competition for gasoline," and tax competition, which "facilitates economic growth by encouraging policymakers to adopt sensible tax policy."

Another barrier to economic freedom is trade restrictions, and a tenacious stumbling block on the road to freer global trade is agricultural subsidies. In Chapter 4, Brian M. Carney, an editorial page writer for The Wall Street Journal Europe, describes how the European system of agricultural subsidies known as the Common Agricultural Policy (CAP) distorts decisions not only in Europe, but also around the world. The CAP consumes half of the annual EU budget, costs the average European family 1,200 euros a year, has led in the past to lakes of European excess milk and mountains of European excess butter, and lowers income in countries throughout the world. Worst of all, it stands in the way of successful completion of the Doha Round of World Trade Organization negotiations, threatening to unleash retaliation particularly in the developing world.

A lesson in the fundamentals of the 10-step program, or that the Index works, is not important just to developing or transitional countries. Clearly, there are some older economic powers that need to learn the lessons as well. It is with these goals in mind that The Heritage Foundation and The Wall Street Journal are pleased to present readers with the 2004 Index of Economic Freedom.  [Link to full introduction and Index below:]

WSJ-Heritage Foundation Freedom Index:
http://www.heritage.org/research/features/index/countries.html

Link to Index:
http://www.heritage.org/research/features/index/downloads.html

January 10, 2004, WorldNetDaily.com, World's economic freedom rising despite terror: Low-tax former East bloc nations providing example for Europe
http://worldnetdaily.com/news/article.asp?ARTICLE_ID=36531

January 12, 2004, Tax-News.com, by Mary Swire, Hong Kong Remains The World's Most Open Economy, According To Survey
http://www.tax-news.com/asp/story/story.asp?storyname=14704

 

9) Dan Mitchell: Job Creation and the Taxation of Foreign-Source Income

[Excerpt]

The U.S. tax code currently places American companies at a competitive disadvantage by taxing them on income earned abroad. This policy of "worldwide taxation" can subject U.S.-chartered companies operating overseas to tax burdens several times larger than those imposed on their foreign counterparts, most of which come from countries with "territorial taxation" (the common-sense policy of taxing only income earned inside national borders).

America's high corporate tax rate--the second highest in the developed world--exacerbates the anti-competitive impact of worldwide taxation, and American companies competing in low-tax jurisdictions like Ireland or Hong Kong are the most adversely affected. As the example in Table 1 indicates, U.S. companies can face an enormous additional burden because of America's worldwide tax regime.

Some lawmakers are concerned that moving toward territorial taxation would encourage companies to relocate jobs and factories from America to low-tax countries. The high U.S. corporate tax rate is an incentive for companies to create jobs and expand operations in jurisdictions with better tax law--or would be if they did not also have to pay the high U.S. corporate tax rate on overseas earnings.

Does this mean that worldwide taxation protects American jobs by making it more difficult for U.S. companies to produce overseas? Absolutely not. Worldwide taxation can--and does--limit the ability of American companies to compete abroad, but it does not affect the decisions of non-U.S. companies. In other words, bad U.S. tax law may prevent an American company from taking advantage of a profitable opportunity to build a factory in a low-tax jurisdiction, but this simply makes it easier for a company from another country to exploit that opening. And since a foreign-based company can ship goods into the U.S. market under the same rules as a U.S. company's foreign subsidiary, worldwide taxation does not insulate America from overseas competition. It simply means that foreign companies get the business and earn the profits. [Link to full analysis below:]

January 26, 2004. The Heritage Foundation, by Daniel J. Mitchell, Ph.D., Job Creation and the Taxation of Foreign-Source Income
http://www.heritage.org/Research/Taxes/em911.cfm

January 14, 2004, LawAndTax-News.com, by Glen Shapiro, EU Seeks WTO Permission To Impose Sanctions On US
http://www.tax-news.com/asp/story/story.asp?storyname=14737

 

10) UN Joins the OECD and the EU, Attacks Tax Competition

[Excerpt from International Tax Review]

A UN meeting of tax experts has proposed setting up a new body covering international tax called the UN Fiscal Committee.

At a meeting in Geneva in December 2003, the ad hoc group of experts on international cooperation in tax matters, discussed the composition and objectives of the new body, which the UN's Economic and Social Council will examine at its next substantive session.

The group is still finalizing the outcomes from the meeting however. Ann Orr at the UN's Department of Economic and Social Affairs in New York said: "The outcome of the meeting has been drafted and circulated to participants for their comments. We are beginning to receive their comments and we're finalizing the outcome so nothing official has been completed." They expect the report to be released in February. . . .

. . . At a two-day meeting in October 2003 in New York, the UN called for the creation of a global commission on tax policy. The UN warned that tax competition led to countries "neutralizing each other's incentives and lowering each government's tax take". The UN statement went on to say: "There are limits to what individual governments can do about tax evasion and tax avoidance."

At the New York meeting, Kofi Annan, UN secretary general, suggested that the 25-member UN ad hoc group of experts on international tax matters could be upgraded to "an intergovernmental body, in the form of either a committee of governmental experts or a specialized new commission".

Antonio Ocampo, the UN undersecretary general for economic and social affairs, said that while initiatives already exist such as the OECD's work to eliminate harmful tax practices, the UN was the only forum for global dialogue on tax matters.

[For a complete copy of the article please go to the January 25, 2004 copy of the International Tax Review, http://www.legalmediagroup.com/internationaltaxreview/]

 

11) Courts Re-Confirm That US Has No Obligation To Enforce Foreign Tax Law

[Excerpt]

The legislative history of the USA Patriot Act does not show clear intent by Congress to abrogate a rule barring suits in the United States to enforce foreign tax judgments, the 2nd U.S. Circuit Court of Appeals ruled Wednesday.

In a case brought by several foreign nations charging major tobacco companies with smuggling or abetting the smuggling of cigarettes, the 2nd Circuit upheld the bulk of the rulings made by an Eastern District of New York judge.

The ruling in The European Community v. RJR Nabisco Inc. was one of three related cases before U.S. District Judge Nicholas Garaufis.

Garaufis had dismissed claims brought against RJR Nabisco Inc. and Philip Morris International Inc. and the affiliates of both companies. Plaintiffs charged that the tobacco companies' alleged complicity in cigarette smuggling was undermining tax collections and driving up law enforcement expenditures for the member states of the European Community. [Link to full article below:]

January 15, 2004, New York Law Journal, by Mark Hamblett, Foreign Tax Claims in U.S. Are Dismissed
http://www.law.com/jsp/article.jsp?id=1073944813132

 

12) WSJ: Escape From Vermont

[Excerpt]

We've all heard of individuals and companies fleeing high-tax jurisdictions. But entire towns or cities? That is the idea du jour in the famous Vermont ski hamlet of Killington, where local leaders say they'd rather be living free in neighboring New Hampshire. They may schedule the issue of secession for discussion at their town meeting this March.

"It kind of reminds us of Colonial days," said Killington Town Manager David Lewis. "The Colonies were being faced with the Stamp Act, the Tea Act, the Sugar Act. England wasn't giving them any rights. They were treating the Colonies as just a revenue source."

The principal villain in this case is Vermont's hyper-activist state Supreme Court, which warmed up for its famous 1999 ruling on civil unions for homosexuals with a 1997 decision declaring Vermont's system of funding schools through local property taxes inequitable and unconstitutional. Then-Governor Howard Dean took things from there, enacting a statewide property tax that has been used to redistribute wealth away from prosperous towns like Killington.

Between 1997 and 2002, state spending in Vermont grew 52% (against combined population growth and inflation of 18%) to one of the highest per-capita totals in the nation. Vermonters also pay a sales tax of 6% and top income tax rate of 9.5%. Add in room taxes and similar tourist levies, and Killington leaders say they send roughly $20 million per year to Montpelier while getting only $1 million worth of state aid in return. The bill would decline substantially in the Granite State, which has sales and income tax rates of zero.

It's unlikely of course that Killington will actually secede. Its famous peak can't be moved east, unless the state Supreme Court orders it. But Vermont's tax malaise is well worth remembering the next time Mr. Dean brags about his fiscal record as its governor. [Link to full article below:]

January 13, 2004, The Wall Street Journal, Review & Outlook: Escape From Vermont
http://www.freedomandprosperity.org/Articles/wsj01-13-04/wsj01-13-04.shtml

January 8, 2004, WCAX-TV (Burlington, Vermont), Killington to Secede from Vermont?
http://www.wcax.com/Global/story.asp?s=%20%201593677

January 12, 2004, WCAX-TV (Burlington, Vermont), Governor Downplays Killington Tax Revolt
http://www.wcax.com/Global/story.asp?s=%20%201597752

 

13) Cato has just released a new study entitled "The Republican Spending Explosion."

[From Veronique de Rugy's study]]

When the Republicans gained control of Congress in 1994, they promised to eliminate the deficit and reduce wasteful spending. For several years, the GOP partly upheld its commitment to fiscal responsibility by modestly curtailing spending growth and balancing the budget in 1998 for the first time since the 1960s.

Unfortunately, the balanced budgets of the late 1990s seemed to create an easy money mindset in Congress, which began a spending spree that continues unabated today. Between fiscal years 2001 and 2004, total federal outlays will rise by about 24 percent, even without the recently passed $87 billion supplemental bill for Iraq. Real discretionary spending increases in fiscal years 2002, 2003, and 2004 are 3 of the 10 biggest annual increases in the last 40 years. Large spending increases have been the principal cause of the government's return to massive budget deficits in recent years.

Although defense spending has increased in response to the war on terrorism, President Bush has made little attempt to restrain nondefense spending to offset the higher Pentagon budget. Nondefense discretionary outlays will increase about 31 percent during President Bush's first three years in office. Congress has failed to contain the administration's overspending and has added new spending of its own. It is clear that Republicans have forfeited any claim of being the fiscally responsible party in Washington.

Looking ahead, Republicans need to rediscover the reforming spirit that they brought to Washington after the landmark 1994 congressional elections. Fiscally conservative Democrats should challenge big-spending Republicans and work to cut unneeded programs from both the defense and nondefense parts of the budget.

In command of the White House, Senate, and House of Representatives, Republicans are primarily responsible for the current budget mess, and it is Republicans who have the power to pare back spending to get the federal budget under control once again. [Link to study below:]

January 23, 2004, Cato Institute, by Veronique de Rugy, The Republican Spending Explosion
http://www.cato.org/pubs/briefs/bpderugy.pdf

 

14) Richard Rahn: Markets and Monopolies

[Excerpt]

Would you invest the money and take the risk to build and operate a hotel if the government directed that you also had to provide rooms in your hotel, at a government-determined rate, for all your competitors to market at a higher price? And that you were required to clean and maintain the rooms sold by Your competitors, and collect the monies for them from the guests? If you were rational, you would say "no" to such a one-sided deal; yet that is precisely what the local phone companies are being told they must do.

The predicable result is the phone companies, for perfectly good reasons, have not invested as much as they would in the new technologies to give Americans the superior high-speed Internet service they desire.

The inability or, more precisely, the unwillingness of the FCC bureaucrats to "think beyond stage one" has, in fact, resulted in less competition and inferior consumer choice, and far less economic efficiency. As with the Justice Department, the real problem is FCC overstaffing with too many bureaucrats who are more concerned about job preservation than the public good. [Link to full op-ed below:]

January 9, 2004, The Washington Times, By Richard W. Rahn, Markets and monopolies
http://www.washingtontimes.com/commentary/20040108-084242-8880r.htm

 

15) Sir Ronald Sanders: Caribbean's financial sector remains under serious threat

[Excerpt]

A top regional official believes the Caribbean's financial services sector remains under serious threat and has sought to warn the region that the recent fight waged against the Organisation for Economic Co-operation and Development (OECD) and its harmful tax competition initiative is far from over.

"There are those who believe that the fight with the OECD on this matter is ended, but they are wrong," said Chairman of the Caribbean Financial Action Task Force (CFATF), Sir Ronald Sanders.

He is further cautioning the region that the work of another international agency, set up by G7 countries to fight money laundering and counter terrorism, presents a "real and present danger" to the development of the region's financial services sector.

The caution comes in the wake of a December 2-4 meeting in Washington of a working group set up by the Paris-based Financial Action Task Force (FATF), which focused on the current round of negotiations on new Anti-Money Laundering/Counter Financing of Terrorism (AM/CFT) Methodology. [Link to full article below:]

December 31, 2003, CountryWatch.com, Caribbean's financial sector remains under serious threat, cautions CFATF chairman
http://www.countrywatch.com/cw_wire.asp?vCOUNTRY=15&UID=965964

 

16) EU admits Europe falling behind US on economy

[Excerpt of AP]

European Union nations are dragging their heels in their ambitious drive to become the world's most competitive economy by the end of the decade, the European Commission said Wednesday.

The EU's executive agency said Europe is falling further behind the United States after a standstill year in which European job growth evaporated, public finances deteriorated and the average unemployment rate rose to 8.1 percent.

In an annual survey of how the 15 EU nations fare in trying to become economically more dynamic, European Commission President Romano Prodi said governments lack political will to overhaul the continent's economies.

His report lamented a "substantial gap" between Europe and the United States in the ability to rally risk capital and money for research and development, quickly process patent applications and spend generously on information technologies.

EU employers reacted to the report with a new plea for governments to cut red tape and "deliver economic reform."

At a 2000 summit in Lisbon, Portugal, the EU leaders pledged to overtake the United States as the world's leading economy by 2010. Link to full article below]

January 21, 2004, Associated Press, By Robert Wielaard, EU says Europe falling behind on economy
http://seattlepi.nwsource.com/printer/ap.asp?category=1310&slug=EU%20Economy

Other EU Artilces

January 22, 2004, The Economist, One Europe, united in fiscal misrule
http://www.economist.com/agenda/displayStory.cfm?story_id=2367033

January 22, 2004, United Press International, By Gareth Harding, Analysis: Eurosclerosis grips EU economy
http://www.upi.com/view.cfm?StoryID=20040122-010934-4904r

January 20, 2004, Tax-News.com, by Amanda Banks, Gibraltar Bankers' Report Cites EU Savings Tax Directive As Major Concern
http://www.tax-news.com/asp/story/story.asp?storyname=14796

January 14, 2004, EUpolitix.com, EU battles fraud image
http://www.eupolitix.com/EN/News/200401/355275db-3592-4348-ade1-d6729791d727.htm

January 8, 2004, Tax-News.com, by Ulrika Lomas, Slovakia's Tax Reforms Now Being Put To The Test
http://www.tax-news.com/asp/story/story.asp?storyname=14678

January 8, 2004, LawAndTax-News.com, by Ulrika Lomas, French President Outlines Tax Plans
http://www.tax-news.com/asp/story/story.asp?storyname=14675

January 7, 2004, Tax-News.com, by Amanda Banks, Cayman Islands Given Until End Of January To Submit Plan For Adoption Of EU Savings Directive
http://www.tax-news.com/asp/story/story.asp?storyname=14662

January 6, 2004, DW-World.de, Slovakia to Become European Tax Haven
http://www.dw-world.de/english/0,3367,1431_A_1079247_1_A,00.html

 

17) CF&P Clips

January 29, 2004, NZZ Online, OECD defuses tax row with Switzerland
http://nzz.ch/2004/01/29/english/page-synd4673108.html

January 28, 2004, LewRockwell.com, by Paul Craig Roberts, America the Unfree
http://www.lewrockwell.com/roberts/roberts27.html

January 27, 2004, The Seattle Times, Terrorism Notebook: Report faults screening of hijackers
http://seattletimes.nwsource.com/html/nationworld/2001844434_terrorpanel27.html

January 26, 2004, Times Leader, By Dawn Shurmaitis, Patriot Act gives rise to activists' suspicions
http://www.timesleader.com/mld/timesleader/news/local/7795221.htm

January 26, 2004, Associated Press, By Linda Deutsch, Part of Patriot Act Ruled Unconstitutional
http://apnews.myway.com/article/20040126/D80AP78O0.html

January 23, 2004, The Royal Gazette, By Colin O'Connor, Kerry pledges to end island's 'creed of greed' within 500 days
http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20040123/MIDOCEAN/1012 30088

January 22, 2004, The Washington Times, By Richard W. Rahn, Fox in the henhouse
http://www.washingtontimes.com/commentary/20040121-090541-7800r.htm

January 21, 2004, Tax-News.com, by Amanda Banks, Hollywood Producers Explore Bermuda's Potential As Film Financing Centre
http://www.tax-news.com/asp/story/story.asp?storyname=14812

January 19, 2004, Mondaq, by David G Forbes-Jaeger and John McBrayer, United States: Terrorists, Crimes & Tax: Anti-Money Laundering and Terrorist Financing Regulation as the U.S. Announces a Budget Increase to FinCEN
http://www.mondaq.com/article.asp?articleid=24011&ASIMPR=133

January 16, 2004, The Washington Times, By Daniel J. Mitchell, Diet for leaner lobbying
http://www.washingtontimes.com/commentary/20040115-084956-6372r.htm

January 16, 2004, Tax-News.com, by Ulrika Lomas, France May Remove Unpopular Business Tax
http://www.tax-news.com/asp/story/story.asp?storyname=14763

January 15, 2004, Tax-News.com, by Amanda Banks, Bahamas/US TIEA 'Not Enforceable' Says Finance Ministry
http://www.tax-news.com/asp/story/story.asp?storyname=14754

January 15, 2004, Tax-News.com, by Amanda Banks, Bermuda's Offshore Sector Praised By Moody's
http://www.tax-news.com/asp/story/story.asp?storyname=14755

January 14, 2004, Reuters on Forbes.com, by Jonathan Nicholson, Report warns US minimum income tax a "time bomb"
http://www.forbes.com/home_europe/newswire/2004/01/14/rtr1211520.html

January 13, 2004, The Washington Times, By Richard W. Rahn, Outside the box
http://www.washingtontimes.com/op-ed/20040112-091557-9795r.htm

January 13, 2004, The Nassau Guardian, by Martella Matthews, Bahamas buried under TIEA? -- Ministry of Finance says TIEA not enforceable
http://www.thenassauguardian.com/business/343642502173575.php

January 13, 2004, Tax-News.com, by Mike Godfrey, Tyco To Remain In Bermuda After Board Rejects Reincorporation
http://www.tax-news.com/asp/story/story.asp?storyname=14717

January 8, 2004, it-analysis.com, by Bob McDowall, More inept UK money laundering regulations from HM Treasury?
http://www.it-analysis.com/article.php?articleid=11556

January 8, 2004, Toronto Sun, By Tom Godfrey, Yanks will see your tax data
http://cnews.canoe.ca/CNEWS/Canada/2004/01/08/307878.html

January 7, 2004, GovExec.com, By Amelia Gruber, IRS announces major overhaul, layoffs
http://www.govexec.com/dailyfed/0104/010704a2.htm

January 6, 2004, The Washington Times, By Jerry Seper, Terror route seen in bank program
http://www.washingtontimes.com/national/20040105-103758-4958r.htm

January 2, 2004, The Washington Times, By John Solomon, Freeze on terror cash not working
http://www.washingtontimes.com/national/20040102-120053-3276r.htm

 

Best regards,

Andrew Quinlan
Center for Freedom and Prosperity
President
202-285-0244
quinlan@freedomandprosperity.org
www.freedomandprosperity.org

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