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Center for
Freedom and Prosperity
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CFP Weekly Update, March 4, 2002

Center for Freedom and Prosperity's Weekly Update

1) Washington Update

2) Rep. Phil English thanks Treasury Secretary O'Neill for resisting tax harmonization, condemns EU and OECD Tax Schemes

3) CFP Strategic Memo:  Paris has Surrendered, Onward to Brussels

4) World Tax Daily on CFP's Role

5) German Chancellor Gerhard Schroeder lets the cat out of the bag

6) Will the left ever get the facts correct? Part I

7) Will the left ever get the facts correct? Part II

8) Freedom Alliance: United Nations Seeks $70 Billion Handout From U.S. Taxpayers

9) AEI on Federalism and the U.S. and E.U.

10) Murdock: Russians Do Taxes Right: The flat tax, Russian style.

11) CFP Supporters Contact Their Representatives…Protest the UN's Tax Grab

12) CFP Clips


1) Washington Update

The OECD's attempt to dictate fiscal policy in low-tax jurisdictions crashed and burned this past week.  Despite the "spin" put out by the Paris-based bureaucracy, the OECD's "harmful tax competition" project failed.  The OECD's February 28th deadline came and went, and less then half of the persecuted jurisdictions capitulated to the OECD.  The CFP Strategic Memo below by Dan Mitchell does a wonderful job explaining the current situation and letting us know where we go from here.

The next chapter in our work has just started. With the EU Savings Tax Directive contingent on the US's approval, we will work hard to make sure that the US does not walk the plank with others who are willing to give up their fiscal sovereignty.

This issue also includes:  Rep. Phil English, a leader in Washington on reforming the US's international tax laws, sent a letter to Secretary O'Neill praising his stance against the tax harmonizers in Europe and encouraging continued vigilance. Germany's Chancellor tells the world that the EU should dictate tax policy.  We also highlight the Left's lunacy and ranting against low tax countries and we share with you excerpts from CFP's supporters to their representatives in Washington protesting the UN's tax schemes, including the International Tax Organization.

Last but not least, please go to the bottom of this report and follow the instructions on how to help support the Center.  Thank you.


2) Rep. Phil English thanks Treasury Secretary O'Neill for resisting tax harmonization, condemns EU and OECD Tax Schemes

House Ways and Means Committee Member Rep. Phil English from Pennsylvania thanks Treasury Secretary Paul O'Neill for resisting tax harmonization schemes of the EU and OECD. Mr. English also praises Ireland's leadership in promoting economic growth by slashing tax rates.

Rep. English stated in part, "I want to thank you for resisting these tax harmonization schemes. Instead of trying to create a tax cartel or a global network of tax police, high-tax nations should reform their tax systems and lower marginal tax rates. Indeed, Ireland's supply-side tax reforms demonstrate how Europe's welfare states can resuscitate their failing economies. Sweeping tax rate reductions have helped boost Irish growth to record levels and reduce unemployment from 15 percent to 5 percent. Little wonder, then, that Ireland is now known as the 'Celtic Tiger' and the 'Hong Kong of Europe.'" [Link to full letter below]


3) CFP Strategic Memo: Paris has Surrendered, Onward to Brussels

[Excerpt from memo]

The OECD's attack against low-tax jurisdictions ended with a pathetic whimper. The February 28 deadline arrived and the Paris-based bureaucracy did not receive a single meaningful "commitment." Most low-tax jurisdictions ignored the OECD's imperialist demands. And the handful of regimes that did capitulate included the so-called "Isle of Man clause" in their commitment letter. This means that they are not obliged to acquiesce until and unless every single OECD member nation agrees to obey the same misguided practices.

The OECD, of course, is trying to downplay its stunning defeat. But no amount of "spin" can alter the facts. The "rich man's club" failed in its effort to create a fiscal cartel for the benefit of high-tax nations. But don't believe me. Go to the OECD website and read the "commitment letters" that arrived in June 2000 and compare those documents to the letters that arrived last week. They are all available at,,EN-document-22-nodirectorate-no-4-4393-22,FF.h tml (but don't be surprised if the OECD pulls down this web-page to mask its embarrassment).

While it is tempting to rest on our laurels and enjoy the OECD's humiliation, the war is far from over and attention now shifts to Brussels. Specifically, our top objective now is to derail the European Union's Savings Tax Directive. This misguided proposal would require unlimited and automatic information sharing between nations. Every EU nation would be expected to take part in this scheme, as would all EU territories and six non-EU nations (Switzerland, the United States, Andorra, Monaco, San Marino, and Liechtenstein).

Link to full memo below:


4) World Tax Daily on CFP's Role

[Excerpt from World Tax Daily, February 28, 2002]

Andrew Quinlan and Daniel Mitchell -- the two-man show running the CFP, a right-wing Washington-based nonprofit organization devoted to lobbying U.S. lawmakers on the issue -- take credit for derailing the project's original focus and for preventing more targeted jurisdictions from complying with the OECD's requirements. "I think the CFP had a lot to do with these countries holding out as long as they did," Quinlan said. "That was important because it gave time for the Bush administration to pull the plug on the OECD initiative, which made it irrelevant."

Quinlan and Mitchell, who periodically traveled to the jurisdictions on the OECD's list, said they kept in close contact with the government leaders and helped them strategize their moves from the beginning. "I think the OECD initiative has been a big flop," Mitchell said. He added:

"What few agreements they're getting are completely meaningless, because they're all conditioned on similar actions by OECD member nations, which, of course, will not happen. And I think the OECD is engaging in sort of a futile face-saving exercise to try to, in effect, paper over one of the most spectacular failures the international bureaucracy has ever had."

[Source: February 28, 2002, World Tax Daily, by Cordia Scott, As OECD Tax Haven Deadline Passes, 23 Countries Hold Out]


5) German Chancellor Gerhard Schroeder lets the cat out of the bag

It is refreshing when a leader of one of the EU's leading countries comes out and lets the world know what the EU's real agenda for the rest of the world – harmonizing tax rates upward.  The BBC news story reports in part:


German Chancellor Gerhard Schroeder has stepped into the growing row over Britain's policy on Europe by calling for taxes to be set at an EU level.

In an interview with The Times newspaper, the German leader called for the "Europeanisation" of "everything to do with economic and financial policy".

He said the EU should determine taxation policies in member states. His comments will be seized upon by the Conservatives as further evidence of moves towards a federal European state.  [link to full article below]

February 22, 2002, BBC NEWS, 'EU should decide taxes' – Schroeder


6) Will the left ever get the facts correct? Part I

Weekly Standard: Bill Moyers

PBS's Bill Moyers is wrong again. Go figure! He attacks low-tax countries and blames Heritage Foundation by name, and CFP by inference, of stopping "the United States from cracking down on terrorist money havens." For those of you who do not live in the U.S., this is the typical way leftist columnists smear and belittle others with different opinions.  Thankfully, some in the media have exposed the truth. Read the attached article and note Dan Mitchell's rebuttal to Moyers' unfounded allegations.

February 25, 2002, Weekly Standard, by Stephen F. Hayes, PBS's Televangelist


7) Will the left ever get the facts correct? Part II

Senator Hollings rants Again

Fox News Channel and Weekly Standard points out the lunacy of Senator Hollings.

Fox News Channel:


. . . CARL CAMERON, FOX NEWS CHIEF POLITICAL CORRESPONDENT (voice-over): In an extraordinary news conference, Democrat Fritz Hollings accused the Bush administration of trying to keep offshore tax havens legal to help Enron, which had over 800 of them. Hollings said the Clinton administration tried to restrict them, but the Bush administration changed course, and it may have helped Usama bin Laden finance the September 11 attacks.

Specifically, Hollings cited White House Economic Advisor Larry Lindsey and the Bush administration's opposition to closing the tax havens.

SEN. ERNEST HOLLINGS (D), SOUTH CAROLINA: The administration with who? Larry Lindsey. Larry Lindsey was the $50,000-a-year consultant for Enron who was running around saying that it was unconstitutional to try to close down these things. And so they immediately, at this time last year, closed down the Larry Summers (ph) effort. And you had 9-1-1.

CAMERON: But the fact is, the 9-11 money has been carefully traced by the FBI and did not go through offshore tax havens. Hollings then renewed his criticism of the Justice Department's investigation of the Enron collapse, and misidentified Attorney General Ashcroft as the energy secretary. . .  [Link to full Fox story below:]

February 27, 2002, Fox News Network, Political Headlines, Senior Democratic senator appears to blame the Bush administration for the 9-11 attacks


From the Weekly Standard:


Have you heard about the latest outrageous statements by Fritz Hollings, chairman of the Enron-probing Senate Commerce Committee? Probably not, because the media blackout of Hollings's excesses continues. First came his comments on February 4, the day Ken Lay took the Fifth before his committee. Hollings said White House budget chief Mitch Daniels, Treasury Secretary Paul O'Neill, and Securities and Exchange Commission head Harvey Pitt had been on the Enron payroll. Wrong on all counts. He quoted Daniels as insisting Enron "get" $254 million in the economic stimulus bill. Wrong again. With rare exceptions, not a word of Hollings's novelistic approach to the truth was reported in the mainstream press, including the Washington Post and New York Times.

Then came outburst number two last week. Hollings said President Clinton had tried to combat Osama bin Laden by shutting down off-shore tax havens. But when George W. Bush became president, the effort ceased, thanks to economic adviser Larry Lindsey, who had served on an Enron advisory panel. The result, according to Hollings: "You had 9/11."

You heard it right. Hollings blamed Bush for the terrorist attacks. Of course, investigators have discovered that offshore tax havens were not used by bin Laden in financing the attacks. Nor is Hollings's potted history of Clinton's anti-bin Laden efforts anything but science fiction. But don't look for any truth-squadding of Hollings from the media--they're too busy going after Republicans.

March 11, 2002, The Weekly Standard, New Statesman, Sen. Hollings, and more.


8) Freedom Alliance: United Nations Seeks $70 Billion Handout From U.S. Taxpayers


Mr. Annan [UN Secretary-General] has a plan - he believes that the best way to narrow the gap between rich and poor nations is to redistribute wealth. Accordingly, his primary proposal is to have developed countries, such as the United States, annually hand over 0.7 percent of their gross domestic product (GDP) to UN coffers for redistribution.

 Doesn't sound like much - particularly for a nation like the United States whose goods and services produced for 2000 totaled about $10 trillion - but it is. Mr. Annan's plan would cost American taxpayers nearly $70 billion - or approximately $59 billion more than the United States already gives to this cause. [Link to full report below]

February 6, 2002, Freedom Alliance: Issue Brief 2002-03, by Fred Gedrich, United Nations Seeks $70 Billion Handout From U.S. Taxpayers


9) AEI on Federalism and the U.S. and E.U.


Federalism poses the challenge of reconciling political decentralization with the demands of an interconnected, fast-paced economy. In going about that task, America should learn an important lesson from the Europeans.

This is not a joke. In many regulatory areas the European Union applies a principle of "mutual recognition" among member states that renders political borders and decentralization consistent with economic efficiency and market integration and is, moreover, conducive to those objectives. This Federalist Outlook describes the Europeans' striking discovery of a core principle of a liberal federal order. It also explains why the European policy elites are bent on repudiating that principle and why they will succeed in doing so. The United States should take the opposite course: we should adopt mutual recognition among states as a central principle of federalism and regulatory policy. [Full report linked below:]

January/February 2002, American Enterprise Institute -- Federalist Outlook, by Michael S. Greve, New Insights from the Old Continent


10) Murdock: Russians Do Taxes Right: The flat tax, Russian style.

March 1, 2002, National Review Online, by Deroy Murdock, Russians Do Taxes Right: The flat tax, Russian style.


11) CFP Supporters Contact Their Representatives…Protest the UN's Tax Grab

Several of the Centers supporters contacted their Congressman and Senators in Washington last week speaking out against the UN Conference on Financing Development next month in Monterey, Mexico.  Below are some of their comments. To get more information on the UN tax scheme, please visit our U.N. Tax Grab web page:

According to the US Constitution, only Congress has the right to tax US citizens.  Please do NOT allow the UN to undermine our sovereignty or our economy, by agreeing to allow them to tax American citizens or the United States of America. We need to recognize that such a tax will only result in a totalitarian world organization that sucks the life out of citizens who have no say in where their hard earned money goes and how it is used.

As my representatives in Washington I must let you know of a situation that deeply concerns me. It has come to my attention that there will be a US Delegation attending the UN Conference on Financing Development next month in Monterey, Mexico. In this meeting, members of the UN will try to:

** Create a massive "International Tax Organization" with the power to dictate global taxation.

** Levy a world-wide energy tax that will cost you more for using coal, oil and gasoline.

** Give foreign governments the power to tax American Income.

** Hand over private financial information to U.N. member governments, including terrorist nations like

Afghanistan, Iraq, Iran, Syria, and Yemen.

After being citizens for many years in this beloved United States of America, we believe in the autonomy of this independent sovereign nation.

We are aghast that there is even the thought of a proposal to ever allow the UN to form, much less that the US should go along with an International Tax idea to levy taxes on our citizens, apart from and presumably over and above the laws of our own country.

If you have any influence with the US delegation to the March 18-22 UN Conference on "Financing the Development" in Monterrey, Mexico, we STRONGLY oppose this outrageous, unprecedented move by the UN, and urge you, Representative Larsen, to convey our concerns in this matter.  We would like you, as our voice in the government…, to vigorously work to protest this proposed UN tax grab.  Don't let UN bureaucrats tax US citizens and attack our US sovereignty.

I just wanted to let you know that I oppose the UN's new proposed International Tax Organization and scheme to levy taxes on American's income.  Please make sure that the US delegation to the March 18-22 UN Conference on "Financing for Development" in Monterey, Mexico are aware of  the concerns of American citizens.

Please advise Treasury Secretary Paul O'Neill the we oppose the UN's new International Tax Organization and their scheme to levy taxes on hard working Americans, and request that he be sure that the US delegation to the conference on "Financing for Development" is aware of their outrageous and unprecedented move by the socialists at the UN.

I am writing you to ask for your opposition to the UN International Tax Organization, which will be holding a conference in Mexico next month. I am sure you agree with me when I say Americans have enough federal, state, and local taxes to worry about without having a new international tax levied on us. I think you will have no trouble in supporting this position.  Thank you for your consideration in this matter. 

I have written my representatives concerning this alarming development (UN efforts to tax the world - see below) before and received platitudes that it would never happen.  As part of the price of liberty (eternal vigilance) I once again request your actions in defense of American sovereignty by opposing any effort of the UN (or any OTHER outside political group) to impose taxes - of any kind or by any other name or in any way - on American Citizens.  I urge you to make sure that the US delegation to the March 18-22 UN Conference on "Financing for Development" in Monterey, Mexico are aware of our concerns. I ask that you direct them to strongly oppose this outrageous, alarming and unprecedented move by the UN.


12) CFP Clips

March 3, 2002, U.S. wants Caymans to clamp down on firms

February 28, 2002,, Vanuatu Explains Refusal To Commit To OECD

February 27, 2002, The Economist, Tax haven hall of shame

February 26, 2002,, by Jason Gorringe, Ireland Rejects Tax Harmonisation Proposal

Friday, 22 February 2002, AFX Europe, Ireland rejects idea of EU tax harmonisation

February 21, 2002, Investors, by Philip Morton, Joint Economic Committee Calls For Changes To US Mutual Fund Taxation

February 24, 2002, The Observer, Gangster Paradise lost,6903,655897,00.html

February 17, 2002,, Switzerland Remains the Offshore Jurisdiction of Choice for Rich

February 7, 2002,, Enronitis Spreads; Focus Shifts to Offshore Centres


Best regards,

Andrew Quinlan
Center for Freedom and Prosperity
208-728-9639 (efax)


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