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Center For Freedom And Prosperity's Weekly Update 2) Fourteenth US Senator Praises Tax Competition and Warns of Dangers of Tax Harmonization 3) Report Promotes Improved Global Cooperation in Fight against Crime, Endorses Privacy Protections for Taxpayers 4) Fiscal Protectionism a Growing Threat Anti-Bermuda Legislation Picks up Steam 5) CFPF Prosperitas: The Case for International Tax Competition: A Caribbean Perspective 6) UN Tax Grab Put on Hold For Now 7) Mitchell: The EU'S Tax Attack on High-Tech and Internet Sales 8) The Same Old Song You Can't Spell Tax Harmonization Without EU 9) Dan Mitchell's Successful Trip to the Bahamas 10) OECD, IMF and the World Bank join forces to develop an International Dialogue on Taxation 12) You are invited to a Seminar on Dynamic Scoring vs. Static Scoring 13) CFP Clips
This week's update is loaded with new information. Indeed, I almost feel compelled to apologize for its length. We have been so busy that we have not had an opportunity to publish an update for two weeks. But this is good news. It is a sign that we continue to make progress and that there is much to report. For instance, yet another U.S. Senator has come out strongly for tax competition. Senator Crapo of Idaho warns the Bush Administration that tax harmonization is the wrong policy. Another major development is that the long awaited report from the Task Force on Information Exchange and Financial Privacy was released. The report shows how the need to protect every American from criminals and terrorists can be balanced with the need to protect financial privacy, civil rights and personal freedoms. We also supply further information on the fiscal protectionism battle brewing in Washington. And we have our final report on the failed UN conference in Mexico and we also update you on some of the new shenanigans of the OECD. Also, if you haven't seen it yet, below is the most recent CFP Foundation Properitas. The analysis gives voice to persecuted low-tax jurisdictions, especially the ones targeted by the OECD. Finally, we have an expanded "CFP Clips" section that we feel you will find interesting.
2) Fourteenth US Senator Praises Tax Competition and Warns of Dangers of Tax Harmonization Idaho Senator Michael Crapo, who serves on the Senate Banking Committee and the Joint Economic Committee, applauds the Bush Administration for its position on international tax competition and urges the White House to "to resist calls to relinquish American sovereignty over our tax policies." The following is an excerpt from Senator Crapo's letter: "A tax cartel is not in America's interests, and I applaud you for resisting Europe's so-called 'harmful tax competition' agenda. Tax harmonization is bad tax policy, but it also is bad foreign
policy. Although the U.S. can benefit from participating in certain international organizations and activities, these must be consistent with our national security interests and reflect the goals of the American
people. Clearly, the creation of an international tax bureaucracy would serve only to create conflict between low-tax and high-tax nations." [Link to full letter below:]
3) Report Promotes Improved Global Cooperation in Fight against Crime, Endorses Privacy Protections for Taxpayers Washington (April 3, 2002) The Center for Freedom and Prosperity, the nation's leader in the fight for international tax competition, welcomed the release of a report from the Task Force on
Information Exchange and Financial Privacy, entitled Report on Financial Privacy, Law Enforcement, and Terrorism. The Task Force, comprised of leaders from the law enforcement, legal, public policy, and tax
communities, endorsed the creation of international standards, modeled after the Geneva Convention, to improve cooperation in the global fight against crime and terrorism. Chaired by former U.S. Senator Mack
Mattingly and guided by Senior Advisors Edwin Meese, former U.S. Attorney General, and Jack Kemp, former Republican Vice Presidential nominee, the Task Force also called on policy makers to more effectively target
money laundering laws. [Link to full press release below:] Task Force Report: http://www.freedomandprosperity.org/task-force-report.pdf
4) Fiscal Protectionism a Growing Threat Anti-Bermuda Legislation Picks up Steam Statist lawmakers in Washington are pursuing legislation to punish businesses that relocate in jurisdictions with more rational tax laws. Over the next several weeks, CFP will be leading an effort to educate Members of Congress on the need to reform the U.S. tax code rather than passing protectionist legislation. Links to background information below: CFP Press Release: Press Clips: April 1, 2002, Sarasota Herald-Tribune: Letter to the Editors, by Earle Wallick, U.S. tax code creates need for corporate shells in Bermuda April 1, 2002, Tax-News.com, by Mike Godfrey, Bermuda's Insurers Edgy Over US Legislation March 27. 2002, The Royal Gazette, By Lilla Zuill, 'Bad, bad tax policy' threat looms March 22, 2002, New York Times, By David Cay Johnston, Senators Assail Corporate Use of Bermuda as Tax Shelter March 21, 2002, Tax-News.com, by Mike Godfrey, Offshore Tax Legislation Likely To Be Passed In US March 19, 2002, The Royal Gazette, By Lilla Zuill, Offshore tax legislation in danger of being passed, warn economists March 15, 2002, The Royal Gazette, By Lilla Zuill, Investors enraged by bid to close 'loophole'
5) CFPF Prosperitas: The Case for International Tax Competition: A Caribbean Perspective The Center for Freedom and Prosperity Foundation released a paper entitled, "The Case for International Tax Competition: A Caribbean Perspective," the sixth analysis released by the CFP Foundation in its "Prosperitas" series. The report finds that one voice is missing in the tax competition/tax harmonization debate. That is the voice of the persecuted jurisdictions, especially the ones targeted by the Organization for Economic Cooperation and Development's proposal to eliminate so-called Harmful Tax Competition. This paper gives voice to the views of those jurisdictions negatively affected by the OECD's fiscal imperialism and discusses the moral, economic, and development implications of tax harmonization proposals such as "information exchange." The paper's author is Carlyle Rogers a native of the Eastern Caribbean island of Anguilla and a post-graduate external research student at the University of London pursuing a master's degree in Corporate and Commercial Law. He is also qualifying as a Solicitor in England and Wales at London's College of Law. [Link to press release and paper below:] Press release: April 2002, Prosperitas Vol. II, Issue II, by Carlyle Rogers, The Case for International Tax Competition: A Caribbean Perspective News clip: March 26, 2002, Tax-News.com, Caribbean Author Lambastes OECD
6) UN Tax Grab Put on Hold For Now The UN's attempt to "Fleece" America failed in Monterrey, Mexico. Despite the platitudes put forth by such "capitalists" as Fidel Castro and Jacques Chirac, President Bush was able to hold off the shakedown from the United Nations. French President Jacques Chirac called for global taxes when he said, "We therefore need to give deeper consideration to the possibilities of international taxation." Cuban President Fidel Castro also endorsed the global tax agenda. Fred Gedrich from the Washington based Freedom Alliance, and member of the Coalition for Tax Competition, was in Monterrey monitoring the UN conference. Last week Fred sent us his final report from the conference. Below is an excerpt from Fred's release: [Excerpt] The global empire they seek requires a lot of money which they thought could be acquired by tapping into the emotions of well-meaning and generous people worldwide particularly U.S. citizens under the guise of helping billions of poor people. [The following in a link to his full report.] March 28, 2002, Freedom Alliance, by Fred Gedrich, Monterrey Money Grabbers Try to Exploit World's Poor CFP Special Update on the UN Tax Grab Background: Additional Clips: March 22, 2002, Reuters, By Andrew Hurst, Bush Lays Down Tough Terms for Aid to Poor March 20, 2002, The Washington Times, By Ben Barber, U.S. spurns renewed calls for world tax March 20, 2002, The Washington Times, by Helle Dale, Poverty and terrorism UN Media Kit: "Halting Global Tax Dodges" March 30. 2002, LewRockwell.com, by Steven Yates, The UN's Non-Conspiracy for World Government and Global Taxation March 25, 2002, Rep. Ron Paul, UN Planting the Seeds for a Coming Global Tax
7) Mitchell: The EU'S Tax Attack on High-Tech and Internet Sales This isn't the first time Europe has tried to undermine our fiscal sovereignty. The European Union already has dragged the United States before the World Trade Organization in an attempt to compel American lawmakers to impose higher taxes on U.S. companies. The EU also wants American officials to weaken financial privacy laws, so they can reach across the Atlantic and tax the money that Europeans have deposited in our banks and invested in our stock market. This so-called "Savings Tax Directive" could drive hundreds of billions, perhaps even trillions, of dollars from the U.S. economy. [Link to full article below:] April 3, 2002, National Review Online, The EU's Tax Attack Also available on the Heritage Foundation website
8) The Same Old Song You Can't Spell Tax Harmonization Without EU From www.no-euro.com newsletter: Main events: 22 March - 28 March 2002 link: [Excerpt] * In a new pamphlet, Britain in Europe (BiE) have claimed that there is no agenda in the Eurozone for tax harmonisation and that harmonisation is only proposed by an "occasional maverick supporter". In the foreword for the pamphlet, BiE's Chairman, Lord Marshall, writes that "the argument in Europe is about tax competition, not tax harmonisation." * The claims that tax harmonisation has only an "occasional maverick supporter" is ridiculous. In his recently-published election manifesto (see below), French Prime Minister Lionel Jospin said, "the coordination of economic policies should be considerably increased, to be able to react efficiently to external shocks. I propose, in terms of corporate tax, that the tax bases should be harmonised and that a minimum rate should be fixed. This would be the first step towards a European tax ... Furthermore, I propose that, in order to be able to harmonise taxes in Europe, fiscal decisions which will affect the Internal Market should be made by QMV and not by unanimity. The same should be the case for social harmonisation" (Je m'engage, 22 March). * Jospin's comments are just the latest in a long line by senior Eurozone politicians. * In a joint article in the FT (8 March), Pascal Lamy, the EU Trade Commissioner said, "a natural first step would be to harmonise the tax bases and to adopt minimum tax rates but the ultimate goal should be the creation of a European corporate income tax whose proceeds would either finance the EU or be allocated to Member States." Lamy continued, "to get there, we may need qualified majority voting on tax matters relating to the single market: controversial in the UK, perhaps, but a logical development." * In an interview with Le Monde on 7 March, French President Jacques Chirac called for "genuine fiscal harmonisation in Europe", saying that "in an open, competitive Europe with a common currency, it is damaging for the French to always be taxed more than everyone else." * In an interview with the Times on 22 February, German Chancellor Gerhard Schroeder called for the "Europeanisation" of "everything to do with economic and financial policy". * The euro lobby has consistently refused to acknowledge that there is a tax harmonisation agenda in the Eurozone. They need to explain how the euro can work without any system of fiscal transfers, a large centralised budget, and further political integration.
9) Dan Mitchell's Successful Trip to the Bahamas From the Nassau Institute World Wide Memo: [Excerpt] Dr. Daniel Mitchell of Heritage Foundation and The Centre for Freedom and Prosperity created a sensation on his visit to Nassau Bahamas this week. He brought a message that the EU Savings Tax Directive can be defeated, and that the fight is to get Washington educated about the issue. Dr. Mitchell warned Bahamians that they should not assume that with the unfortunate signage of the OECD Harmful Tax Practices commitment, the OECD would pull back at all. He made it plain that the OECD will not stop until the OFCs are abolished. For more information: www.nassauinstitute.org/
10) OECD, IMF and the World Bank join forces to develop an International Dialogue on Taxation We are not surprised that the OECD wants to help create a global tax cartel. It is disappointing, however, to see that the IMF and World Bank have decided to become lackey's for European welfare states. If the IMF, World Bank, and OECD all agree on something, it is probably a bad idea. The attached link from the OECD website confirms this suspicion. These three international bureaucracies are proposing an "International Dialogue on Taxation," to help address the "the constraints [globalization] places on countries' ability to set and enforce their own taxes..." The publication talks about "the need to mobilize revenue" and "strengthening revenue-raising capacity," so there should be little doubt about the ideological agenda. Most worrisome, the publication identifies a key function of this group to be to "Facilitate the identification and sharing of good practices in taxation, and discuss how they could be implemented." Translated into English, they will be advocating tax harmonization policies such as information exchange. Link to press release: Link to paper:
A) OECD Observer Article: Tax and Wealth Creation The OECD must be feeling the heat. After all, why else would an organization devoted to punitive taxation of wealth publish an article pretending otherwise? [Link to article below:] B) OECD Observer Article: Taxation in a Global Environment Talk about sins of omission. The OECD says there are three responses to tax competition: 1) capital controls, 2) explicit harmonization, and 3) implicit harmonization via information exchange. Not
surprisingly, they did not acknowledge that competition is desirable and failed to mention that tax reform can help makes countries more competitive. [Link to article below:]
12) You are invited to a Seminar on Dynamic Scoring vs. Static Scoring. When lawmakers consider tax policy changes, Congress's Joint Committee on Taxation and the Treasury Department's Office of Tax Analysis are responsible for estimating the likely impact on future tax collections. But these estimates assume that tax policy changes regardless of their magnitude have no impact on the economy's performance. As such, these "official" estimates commonly overstate both the amount of tax revenue that will be generated by tax increases and also exaggerate the amount of revenue the government will "lose" because of tax rate reductions. This "static" methodology has been widely criticized because it provides policy makers with inaccurate numbers and creates a bias against lower tax rates. Dynamic analysis sometimes referred to as "reality-based scoring" acknowledges that taxes do affect the economy. Dynamic scoring recognizes, for instance, that higher tax rates discourage work, saving, and investment, and therefore will not raise the amount of money suggested by static estimates. And because lower tax rates increase economic growth, result in more jobs, higher wages, and bigger profits, dynamic scoring will show that certain tax cuts will be at least partially self-financing. This more accurate methodology should be used instead of static scoring. Panelists will discuss these issues and explain how policy makers can improve the tax-writing process. Seminar Info: Monday, April 8th You must RSVP to attend. List of speakers, additional information and RSVP instructions linked below:
March 31, 2002, Los Angeles Times, By Kathy M. Kristof, IRS Returns to Tougher Stance on Tax Cheats March 27, 2002, Free Congress Foundation's Notable News Now, by J. Bradley Jansen, What Will 9-11 Mean? March 26, 2002, Tax-News.com, Caribbean Author Lambasts OECD March 26, 2002, The Wall Street Journal, By John D. McKinnon, Scope of Offshore Credit-Card Use For Tax Evasion Is Huge, IRS Says March 25, 2002, Financial Times, OBSERVER: Entertaining account OBSERVER COLUMN March 22, 2002, National Review Online, by Dan Mitchell, Russia: 1, U.S.: 0: Look who was first to adopt the ideal free-market tax system March 21, 2002, Reuters, By Jonathan Nicholson, US still committed to OECD tax effort March 20, 2002, Tax-News.com, by Jason Gorringe, High Tech Sector In Ireland Warns Against EU Tax Harmonisation March 18, 2002, The Times, By Philip Webster, Thatcher: Britain must start to quit EU March 18, 2002, Tax-News.com, by Ulrika Lomas, EU Summit Steps Closer To Fiscal Harmonisation March 15, 2002, Tax-News.com, by Ulrika Lomas, EC President Urges Common Tax Rules March 15, 2002, Tax-News.com, by Jason Gorringe, UK To Change 'Non-Domiciled' Rule At Its Peril March 14, 2002, Tax-News.com, Another US Senator Comes Out Against Tax Harmonisation March 13, 2002, Tax-News.com, US Congress Threatens Emigre Companies March 12, 2002, Tax-News.com, by Ulrika Lomas, UK Will Veto EU Corporate Tax Harmonisation Plans March 11, 2002, Accountancy Age, Foreign millionaires to lose some tax perks March 10 2002, Financial Times, By Christopher Swann, Treasury ready to close tax domicile loophole March 8, 2002, Insight. By Jamie Dettmer, Cash Combat Thu, March 7, 2002, Irish Independent, by Brendan Keenan, Smoke signals on EU tax are cloudy March 4, 2002, The Offshore Financial Intermediary reprints CFP's Strategic Memo: Paris has Surrendered, Onward to Brussels March 2002, Offshore Jurisdictions, by Will Foggon, Luxembourg continues to hold its place among the elite of low tax centres in the face of EU attempts to impose withholding tax and OECD
pressure to force information exchange February 25, 2002, The Black World Today: Letter to Editors, by Alvaro Aguilar, Using The Enron Scandal To Undermine Caribbean Countries...
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