Contact Information:

Center for
Freedom and Prosperity
 P.O. Box 10882
Alexandria, Virginia
22310-9998
202-285-0244

CF&P E-Mail Update, June 9, 2003

Center for Freedom and Prosperity's E-mail Update

1) Washington Update

2) EU Savings Tax Cartel

3) Dick Armey Speaks on the Virtues of Tax Competition and Financial Privacy at Cayman Islands Conference

4) Quinlan, de Rugy and Bate Speak at Cayman Island Forum

5) 24 House Members Ask Snow to Permanently Withdraw IRS Interest Reporting Rule

6) ATR: Setting the Story Straight: The Truth About Corporate Inversions

7) Heritage Foundation's President Ed Feulner: "It's not often one can say France's tax policy make more sense than ours."

8) Forbes: The Misery Index -- Misery Hates Company

9) Tax Foundation:  First Annual State Business Tax Climate Index

10) Times: Drug groups set up own insurer

11) Ingersoll-Rand Retains Bermuda charter, Puts Shareholders Before Greedy Politicians

12) CF&P Applauds President and Congress: Tax Cut Legislation Produces Lower Taxes on Capital and Elimination of Anti-Competitive "Section 911" Provision

13) Senate Takes Small Step Toward Territorial Taxation

14) Eyeing Russia, Ukraine Passes a 13% Flat Tax

15) Taxpayers Association of Europe Rejects Own European Union Tax

16) Oxfam Pushing Bogus Information . . . Again

17) Senator Shelby Introduces Flat Tax Legislation

18) Washington Times:  To seize or not to seize

19) Is the Greenback in Peril? New kid on the currency block rises as a challenger.

20) CSE Foundation Tax Forum: What Next? Tuesday, June 10 at noon

21) CF&P Clips

 

1) Washington Update

The President and Congress passed a significant tax cut in history and many of the supply-side tax reforms we advocated made it in to the final package.  We where also happy the attempt to repeal Section 911 failed.  We have already started working with Congressional leaders on the upcoming international tax bill and we hope that we can take some big steps toward a territorial tax system.

The European Union finalized their "Savings Tax Directive."  Thankfully the United States has no intention of participating in this misguided cartel.  Our battle to derail the IRS's interest reporting regulation is still ongoing and we received a boost from twenty-four Members of Congress when they sent a letter to Treasury Secretary Snow urging its withdrawal.

I also had the pleasure to participate along with former House Majority Leader Dick Armey in a Cayman Islands tax conference.  Mr. Armey's was the first member of the US Congress to resist the OECD's attack on low-tax jurisdictions and attendees showed their appreciation.  Below is an article on the conference and Mr. Armey's presentation.

There are several other articles of interest below, including Ingersoll-Rand's decision to stay in Bermuda, Americans for Tax Reform setting the record straight on corporate inversions, Heritage Foundation's President Ed Feulner on Section 911, Forbes' Tax Misery Index, and Senator Shelby's Introduction of a Flat Tax bill.

Best regards, AQ

 

2) EU Savings Tax Cartel

The European Union purportedly has finalized a savings tax cartel that will require all nations to either emasculate privacy laws or impose a withholding tax on nonresident savings income. This is a good news/bad news/good news proposition. The good news is that the proposal is not nearly as bad as the original EU scheme (it is filled with loopholes, for instance, and greatly undermines the OECD's assault on low-tax jurisdictions). The bad news is that it is still a big step in the wrong direction and a step that will encourage Europe's high tax welfare states to pursue additional tax harmonization policies. But then there is additional good news because there are still many hurdles that the EU must overcome before the new cartel can go into effect.

June 4, 2003, Financial Times, by Francesco Guerrera, EUROPE: EU agrees savings tax deal to start in 2005
http://www.freedomandprosperity.org/Articles/ft06-04-03/ft06-04-03.shtml

EU Press Reports:

Taxation: Commission welcomes adoption of package to curb harmful tax competition
http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/03/787|0|RAPI D&lg=EN

Results of Council of Economics and Finance Ministers, Luxembourg, 3rd June 2003 taxation and financial services
http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=MEMO/03/123|0| RAPID&lg=EN

June 5, 2003, The Royal Gazette, By Mairi Mallon, Island [Bermuda] exempt from EU tax agreement
http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20030605/BUSINESS/1060500 52

June 4, 2003, DW-World.De, EU Agrees on Taxing Foreign-Earned Interest
http://www.dw-world.de/english/0,3367,1431_A_885626_1_A,00.html

June 4, 2003, SwissInfo, EU tax deal gives Swiss room to bargain
http://www.swissinfo.org/sen/Swissinfo.html?siteSect=105&sid=3902995

May 20, 2003, Tax-News.com, by Jason Gorringe, Jersey Banks Face Huge Costs Over EU Savings Tax Directive
http://www.tax-news.com/asp/story/story.asp?storyname=11954

 

3) Dick Armey Speaks on the Virtues of Tax Competition and Financial Privacy at Cayman Islands Conference

Former House Majority Leader Dick Armey was the keynote speaker at the Cayman Islands Chamber of Commerce's Economic Forum on May 30, 2003.  Mr. Armey was the first Member of Congress - in September of 2000 - to take on the tax harmonization agendas of the Clinton Administration and the Organization for Economic Cooperation and Development (OECD).  Mr. Armey's principled stance (letter dated September 7, 2000) was a much-needed shot in the arm for many low-tax jurisdictions that were being browbeaten by the OECD, European Union and the Clinton White House.  Mr. Armey's comments touched on several topics including the "audacity" of the OECD, financial privacy and how freedom and prosperity is a fundamental human right. Below is a "pdf" copy of a news report on Mr. Armey's comments:

June 2, 2003, Cayman Net News, by George Alleyne, OECD Dubbed Impudent
http://www.freedomandprosperity.org/armey-cayman.pdf

Former House Majority Leader Dick Armey's letter to Former Treasury Secretary Larry Summers
http://www.freedomandprosperity.org/armey.pdf

 

4) Quinlan, de Rugy and Bate Speak at Cayman Island Forum

The Center for Freedom and Prosperity Foundation brought several speakers to the Cayman Islands to participate in the Chamber of Commerce's Economic Forum. Before former Majority Leader Dick Armey gave the keynote address, CF&P President Andrew Quinlan discussed the efforts in the United States to promote tax competition on Capitol Hill and in the Bush Administration. Dr. Veronique de Rugy, Fiscal Policy Analyst of the Cato Institute, discussed tax competition and why high tax European countries are pushing to harmonize taxes at the expense of the Cayman Islands and other low tax jurisdictions. Dr. Roger Bate of the International Policy Network gave a great presentation on "Harmonizing Taxes and Regulation:  A European Plot." Dr. Bate's presentation is linked below.

The Center is planning on organizing and participating in additional forums over the next several months.  We will let you know our schedule in the near future.

Dr. Roger Bate's Presentation
http://www.freedomandprosperity.org/Papers/bate05-30-03/bate05-30-03.shtml

 

5) 24 House Members Ask Snow to Permanently Withdraw IRS Interest Reporting Rule

Led by Ways and Means Committee member Mark Foley and Financial Services Committee member Walter Jones, twenty-four Members of the U.S. House of Representatives, in a bi-partisan letter, urged Treasury Secretary Snow "to permanently withdraw [the IRS's interest reporting] regulation." [Text of letter below.]

The Congressmen object to a proposed Internal Revenue Service regulation (133254-02) that would require U.S. financial institutions to report bank deposit interest paid to certain nonresident aliens.

Link to letter:
http://www.freedomandprosperity.org/ltr/foley-jones-irs/foley-jones-irs.shtml

For more information on the regulation:
http://www.freedomandprosperity.org/update/irsreg/irsreg.shtml

News Clips:

More Lawmakers Urge Treasury to Withdraw Nonresident Alien Interest Reporting Rules

[Excerpt]

Two dozen House lawmakers May 16 urged Treasury Secretary John Snow to withdraw proposed rules (REG-133254-02) that would require U.S. banks to report interest paid on deposits by nonresident aliens from 16 countries, predicting damage to the U.S. economy if the rules go into effect.

"This rule would impose a harsh paperwork burden on American banks and undermine the competitiveness of U.S. financial institutions," the congressmen said in a May 16 letter. "Simply stated, international investors surely will move their funds--potentially more than $100 billion--to banks in London, Zurich, Hong Kong, and elsewhere if the regulation is finalized."

The document was signed by Joint Economic Committee Chairman Rep. Jim Saxton (R-N.J.) and House Ways and Means Committee members Philip Crane (R-Ill.) and Mark Foley (R-Fla.), among others.

The letter, which asserted the proposed rules are "not only unnecessary, but a clear violation of congressional intent," is another sign of increasing pressure on the administration to abandon the rules.

The rules are the administration's second try at requiring interest reporting for nonresident aliens; an earlier set of regulations called for reporting on interest paid to aliens from 150 countries.

[Source: May 23, 2003, Bureau of National Affairs, By Alison Bennett, More Lawmakers Urge Treasury to Withdraw Nonresident Alien Interest Reporting Rules, www.bna.com]

 

May 26, 2003, LawAndTax-News.com, by Glen Shapiro, 24 House Members Call For Permanent Repeal Of US Interest Reporting Rule
http://www.tax-news.com/asp/story/story.asp?storyname=12011

 

6) ATR:  Setting the Story Straight: The Truth About Corporate Inversions

[Excerpt]

Several Members of Congress have recently proposed offsetting the tax cuts in the Bush Economic Growth Package with something they are referring to as "revenue raisers." Unfortunately, despite the rosy image that these Members have attempted to create, the revenue raisers are, in fact, nothing more than a list of unjustifiable and unethical tax increases. One of the intended targets of the new legislation is the practice of corporate inversion. However, few Members seem to fully comprehend the issue of inversion, and media coverage of the topic has only further skewed its understanding. The confusion could have dangerous consequences if left uncontested, so it will be critical in the weeks and months ahead to raise public awareness by clarifying the truly negative effect of the tax increase proposal for corporate inversion.

May 15, 2003, Americans for Tax Reform, by Grover Norquist and Damon Ansell, Setting the Story Straight: The Truth About Corporate Inversions
http://www.atr.org/opeds/051503oped.html

 

7) Heritage Foundation's President Ed Feulner: "It's not often one can say France's tax policy make more sense than ours."

[Excerpt]

It's not often one can say France's tax policy make more sense than ours.

After all, in 2000, the average Frenchman paid 54 percent of his income in state and federal taxes, while the average American paid 42 percent. That, of course, is one reason why our economy is so much more robust than France's

But there's one advantage to France's system: If a highly skilled, well-paid employee makes the sensible decision to leave France to work in the United States, he leaves his high income-tax rate behind. France taxes only those who work inside its borders.

Not so with the United States. Americans abroad still must pay U.S. income taxes, in addition to the income taxes of the country they're working in. [Link to full article below:]

May 20, 2003, National Review Online, By Ed Feulner, Unfair, If You're Over There: France doesn't tax expatriate incomes. Why do we?
http://nationalreview.com/nrof_comment/comment-feulner052003.asp

 

8) Forbes: The Misery Index -- Misery Hates Company

[Excerpt from Forbes]

The annual publication of our Tax Misery Index and other measures of the state's burden establishes a benchmark for companies and individuals weighing siting alternatives in competing countries. Of course, tax is not the sole factor in choosing a corporate or personal location, but when equally attractive options are on the shortlist, the tie-breaker for enterprising people is generally tax. These comparisons provide the tools to make that pick.

The Misery Index is the best measure we've found for the weight that is keenly felt by entrepreneurs who are the source of employment and wealth. They and their backers are the fastest interpreters of economic incentives around the globe.

The news this year is good--the marginal rates continue to decrease. The Misery Index is lower in 9 of the original 26 countries this year; only 4 increased tax misery slightly, and half the original countries are at the same level. And we can look forward to France and Germany reducing their misery in 2004 and again in 2005--in Germany's case, by a total of five points. Also new for 2003 is the addition to the Misery Index of 24 more countries or locations. [Link to full article below and link to a useful (colorful) chart:]

May 26, 2003, Forbes, by Jack Anderson, The Misery Index -- Misery Hates Company
http://www.forbes.com/home_asia/global/2003/0526/030.html

May 26, 2003, Forbes, Chart: Tax Misery Index
http://www.forbes.com/home_asia/global/2003/0526/030chart.html

 

9) Tax Foundation: First Annual State Business Tax Climate Index

Individual states in the United States compete for business and economic growth by lowering or forgiving taxes. Tax competition works between businesses, states and, yes, even countries and nations. Please see the Tax Foundation's study below for more information.

[Excerpt]

I'm pleased to announce the release of the Tax Foundation's latest study, The State Business Tax Climate Index, which ranks the 50 states on how "business friendly" their tax systems were at the start of 2003. We hope that this new index becomes to business what Tax Freedom Day® has become to individual taxpayers.

I've attached a PDF of the Executive Summary and the link to the complete study is below.

States routinely assemble and publicize generous packages of tax abatements and public spending to lure large employers: baseball teams, auto plants or the corporate headquarters of a major firm. But under the media radar, each state's tax system is constantly competing with its neighbors for start-ups and business expansion without the benefit of special tax breaks. The State Business Tax Climate Index is designed to gauge which tax systems give their states a leg up in this competition.

The simplest measure of state taxes is the "tax burden," i.e., the percentage of all income taken by taxes. While businesses have always taken note of the Tax Foundation's annual tax burden estimates, some have commented that the structure and complexity of a state's tax system is as important as the amount collected. The State Business Tax Climate Index gauges the economic damage caused by the manner in which each state extracts tax revenue. [Link to study below:]

May 2003, Tax Foundation, State Business Tax Climate Index
http://www.taxfoundation.org/businesstaxclimate.html

 

10) Times: Drug groups set up own insurer

[Excerpt]

SEVEN of the world's largest pharmaceutical companies, including AstraZeneca and GlaxoSmithKline, are to set up their own insurance company to avoid the soaring cost of premiums.

The seven formally established Pharmaceutical Insurance Ltd in Bermuda, the island tax haven, last week after a year of negotiations.

Drug companies have been among the worst affected by rising insurance costs over the past year, with some insurers refusing to cover the first 50 million of losses. The companies regularly face excesses of 20 million on certain risks.

May 28, 2003, The Times (London), By Christine Seib, Drug groups set up own insurer
http://www.timesonline.co.uk/article/0,,5-694711,00.html

May 27, 2003, The Times (London), By Christine Seib, Excess bills drive firms to insure themselves
http://www.timesonline.co.uk/article/0,,5-693516,00.html

 

11) Ingersoll-Rand Retains Bermuda charter, Puts Shareholders Before Greedy Politicians

May 30, 2003, The Royal Gazette, By Mairi Mallon, Ingersoll holders reject move back to America
http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20030530/BUSINESS/1053000 55

May 29, 2003, Dow Jones, Ingersoll Holders Reject Reincorporating in U.S.
http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20030529/bs_dowjones/200 305291332000843

May 29, 2003, The Associated Press, Ingersoll-Rand Holders Vote Against Move
http://www.washingtonpost.com/wp-dyn/articles/A54742-2003May29.html

May 28, 2003, Forbes, By Karen Padley, Ingersoll-Rand to get shareholder heat on Bermuda
http://www.forbes.com/business/newswire/2003/05/28/rtr984315.html

 

12) CF&P Applauds President and Congress: Tax Cut Legislation Produces Lower Taxes on Capital and Elimination of Anti-Competitive "Section 911" Provision

Andrew F. Quinlan, President of the Center for Freedom and Prosperity, released the following statement on passage of the economic growth bill:

"The Center for Freedom and Prosperity applauds Congress for sending a bill to the President that reduces the double-taxation of capital gains and dividends and accelerates the planned marginal tax rate reductions. While the overall tax cut is disappointingly small, reducing taxes on income, dividends, and capital gains will make America's tax system more competitive. We are also very pleased that lawmakers removed the anti-competitive "Section 911" provision. The Center and the Coalition for Tax Competition worked very hard over the last two weeks making sure that Congress understood that it is bad policy to tax Americans who live and work overseas."

News Clips:

May 29, 2003, USA Today, by Richard Benedetto, 10-year tax cuts signed into law
http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20030529/ts_usatoday/5196 799

May 29, 2003, The Associated Press, By Jennifer Loven, President Signs Tax Cut Package Into Law
http://www.washingtonpost.com/wp-dyn/articles/A53130-2003May29.html

May 28, 2003, Reuters, US's Snow: Tax Cuts Put Economy on Growth Path
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030528/pl_nm/bush_taxes_sno w_dc_1

May 28, 2003, AFP, Bush signs tax cut into law
http://story.news.yahoo.com/news?tmpl=story&u=/afp/20030528/ts_afp/us_economy_bu sh_tax_030528195118

May 22, 2003, Expatica.com, The fight to save the US expat tax break
http://www.expatica.com/index.asp?pad=5,27,&item_id=31455

May 21, 2003, USA Today, By William M. Welch, Provision is dropped after expatriates' outcry
http://www.usatoday.com/news/washington/2003-05-21-expat-usat_x.htm

May 15, 2003, Tax-News.com, by Mike Godfrey, Section 911 Repeal May Have Repercussions For Bermuda
http://www.tax-news.com/asp/story/story.asp?storyname=11902

May 15, 2003, CQ Today, By Jill Barshay, Democratic Senator Champion of Tax Cut, while Republican Leaders Cast as Villains
http://www.freedomandprosperity.org/Articles/cq05-15-03/cq05-15-03.shtml

 

13) Senate Takes Small Step Toward Territorial Taxation

The Center for Freedom and Prosperity praised Senator John Ensign (R-NV) for amending the Senate tax bill to temporarily slash an onerous tax penalty that discourages companies from investing their foreign-source income in America. Senator Ensign's amendment, which was co-sponsored by Senators George Allen (R-VA), Barbara Boxer (D-CA), and Gordon Smith (R-OR), lowers the tax rate on repatriated profits from 35 percent to 5.25 percent, a reform that experts predict could attract several hundred billion dollars to the U.S. economy. Even though the Amendment was not part of the final tax bill, it does put 75 Senators on the side of moving toward a territorial tax system.  Below is the link to our press release when the Amendment passed.

May 16, 2003, CF&P Press Release: Ensign Repatriation Amendment Passes By 3-1 Margin: Shift Toward Territorial Taxation Will Bring Capital to US Economy
http://www.freedomandprosperity.org/press/p05-16-03/p05-16-03.shtml

May 19, 2003, Tax-News.com, by Mike Godfrey, Ensign Amendment To Senate Tax Bill Welcomed
http://www.tax-news.com/asp/story/story.asp?storyname=11928

May 27, 2003, Tax-News.com, by Mike Godfrey, No Reduced Tax For Earnings Repatriated To US
http://www.tax-news.com/asp/story/story.asp?storyname=12020

House Version of Legislation

H. R. 767: Homeland Investment Act of 2003
http://thomas.loc.gov/cgi-bin/bdquery/z?d108:h.r.767:

April 28, 2003, Homeland Investment Coalition Letter to Ways and Means Chairman Bill Thomas:
http://www.itaa.org/taxfinance/docs/thomasltr428.pdf

April 28, 2003, Homeland Investment Coalition Letter to Senate Finance Committe
http://www.itaa.org/taxfinance/docs/financeltr428.pdf

April 8, 2003, Dreier, English, Brady Tout Key Economic Growth Legislation
http://dreier.house.gov/releases/pr040803a.htm

February 14, 2003, Dreier, English, Brady Introduce Homeland Investment Act
http://dreier.house.gov/releases/pr021403.htm

February 14, 2003, English, Dreier, Brady Stimulus Bill to Promote Investment in Homeland
http://www.house.gov/apps/list/press/pa03_english/homelandInvest0203.html

 

14) Eyeing Russia, Ukraine Passes a 13% Flat Tax

[Excerpt]

Ukraine's parliament followed Russia's lead Thursday, approving a 13 percent flat income tax in a move hailed by the government as a crucial step toward creating a prosperous middle class and reducing the country's shadow economy.

The bill, which will take effect from Jan. 1, was backed by a majority of 352 deputies in the 450-seat chamber.

The 13 percent flat income tax Russia introduced in 2001 is widely credited with helping to boost the country's economy.

Ukraine's parliament, the Rada, changed the income tax regime from the current rates of 10, 15, 20, 30 and 40 percent. [Link to full article below:]

May 23, 2003, The Moscow Times, Eyeing Russia, Ukraine Passes a 13% Flat Tax
http://www.themoscowtimes.com/stories/2003/05/23/044.html

 

15) Taxpayers Association of Europe Rejects Own European Union Tax

[Excerpt from Press Release]

The European taxpayer organization, the Taxpayers Association of Europe, rejects the proposal of the European Convention, to finance the European Union budget exclusively from own resources with the inherent danger of creating an own European Union tax. Instead of this, the existing financing system should be kept. The existing financing system, with the upper limit at a value of 1.27 per cent of the Gross National Product of the European Union, ensures household discipline and planning security.

Each new European Union tax will be, in contrast to all promises from the political side, an additional one, states TAE's president Rolf von Hohenhau. At the same time there would exist a danger of an increase of European taxes in general and the taxpayers of Europe, who are already heavily burdened with duties and taxes would be exposed to further financial strains. [Link to full press release below:]

June 6, 2003, Taxpayers Association of Europe (TAE), TAE Rejects Own European Union Tax
http://www.freedomandprosperity.org/eu/TAE-EUSTD.pdf

 

16) Oxfam Pushing Bogus Information . . . Again

Every year, Oxfam, a U.K.-based leftist group, releases the same old study reporting that offshore financial centers hurt the poor. CF&P Foundation's first Prosperitas study released in August of 2001 proved Oxfam's study was bogus.

CF&P Foundation's Study Executive Summary (August 2001): Oxfam, a U.K.-based charity, published a study last year claiming that so-called tax havens deprive developing nations of $50 billion of tax revenue each year. Supporters of the anti-tax competition initiative of the Organization for Economic Cooperation and Development (OECD) frequently cite this figure in hopes of creating a schism among developing nations. Yet the study is grossly flawed, which explains why even the OECD refuses to endorse its methodology. A large share of supposed foregone revenue 70 percent, or $35 billion comes from a calculation of multinational tax revenues in which Oxfam makes up figures for both corporate profits and corporate tax rates. Foregone taxes on individual savings are claimed to "cost" governments about $15 billion, but this figure also is based on make-believe tax rates. At no point does Oxfam recognize the pro-growth impact of lower tax rates. Instead, the organization clings to an outmoded ideological affinity for larger government.  [Link to CF&P's Foundation Prosperitas study below and link to news story on Oxfam report.]

August 2001, Prosperitas, Oxfam's Shoddy Attack on Low-Tax Jurisdictions, by Daniel Mitchell (Volume I, Issue I)
http://www.freedomandprosperity.org/press/p07-27-01/p07-27-01.shtml

May 27, 2003, Tax-News.com, by Ulrika Lomas, Bank Secrecy Costs Developing Nations $50 Billion A Year, Says Oxfam
http://www.tax-news.com/asp/story/story.asp?storyname=12022

 

17) Senator Shelby Introduces Flat Tax Legislation

[Press Release Excerpt]

U.S. Senator Richard Shelby (R-AL) introduced S. 1040, the "Freedom and Fairness Restoration Act of 2003." This bill would repeal the current Internal Revenue Code and replace it with a flat tax rate that would apply to all taxpayers.

Like President Bush's plan, S.1040 eliminates the double taxation of dividends, but it goes further by creating a single tax rate for all taxpayers seventeen percent when the tax is fully implemented. The legislation would also eliminate the many marginal rates, all itemized deductions and credits, the alternative minimum tax, and the taxation of Social Security benefits. In place of itemized deductions, each taxpayer would be given a standard deduction of $12,790, or $25,580 in the case of a couple filing jointly. Taxpayers would receive an additional $5,510 standard deduction for each dependant. Therefore, a family of four would need to make over $36,600 before they would pay a single penny of taxes. [Link to full release:]
http://www.senate.gov/~shelby/news/record.cfm?id=203797

 

18) Washington Times:  To seize or not to seize

There are a few ongoing controversies about the Patriot Act, the batch of laws passed to combat terrorism in the aftermath of the September 11 attacks. Most serious is the charge that anti-terror laws are being misapplied to advance agendas that have nothing to do with preventing another attack on America. If so, this is a serious problem.

Specifically, civil-liberties groups are warning that the Justice Department is abusing powers derived from the Patriot Act. The agency argues that it very clearly is utilizing Patriot Act provisions for crime-fighting beyond anti-terror activities, but that it is perfectly within the bounds of the law to do so. Of particular import is Section 319, which gives prosecutors the ability to seize foreign assets in U.S.-based accounts of foreign banks if there is probable cause that the funds were obtained illegally. On Friday, Justice Department spokesman Bryan Sierra explained to us that, "When tools are available, yes, we'll use them. There is no wording in the law that limits this provision to terrorism. And given the complex connection between terrorism and money-laundering and other criminal activity, such as drug trafficking, we think it is appropriate to use the law to track down proceeds of illegal activity generally." [Link to editorial below:]

June 2, 2003, The Washington Times, Editorial: To seize or not to seize
http://www.washtimes.com/op-ed/20030601-090121-4633r.htm

 

19) Is the Greenback in Peril? New kid on the currency block rises as a challenger.

The US dollar could lose its appeal as a currency of reserve, argue Terrence and Deborah Dwyer, visiting fellows at the Asia-Pacific School of Economics and Management, ANU. Alex Erskine, managing director of Erskinomics Consulting, says the main alternative, the euro is unproven as a replacement. [Below is a link to a two page "pdf" new article:]

May 24-May 25, 2003, The Weekend Australian Financial Review, Is the Greenback in Peril? New kid on the currency block rises as a challenger.
http://www.freedomandprosperity.org/eu/dwyer05-25-03.pdf

 

20) CSE Foundation Tax Forum: What Next? The State of Fundamental Tax Reform: The Impact of the 2003 Tax Cut and a Look Ahead

For the third time in three years, Congress has passed a tax cut.  Is the game plan a new tax cut every year, or is there still the possibility of a bill to completely scrap and replace the current code?  What are the economic consequences of incremental and temporary tax policy?  And what measures should Congress include in the tax package we will need in 2004?

Join Citizens for a Sound Economy Foundation on Tuesday, June 10 at noon in room 2325 Rayburn House Office Building, for a discussion on these important questions, and help determine the future course of tax code reform. To R.S.V. P. for this event, please contact 202-783-4687 or email Dlyons@cse.org. For questions regarding the event, please call Derek Lyons at 202-942-7659.

 

21) CF&P Clips

June 5, 2003, The Washington Times, By Richard W. Rahn, Perils of state-owned news outlets
http://www.washtimes.com/commentary/20030604-104133-4325r.htm

May 29, 2003, BusinessWeek Online, By Suzanne Robitaille, Lights, Camera -- Tax Breaks!
http://www.businessweek.com/bwdaily/dnflash/may2003/nf20030529_2793_db017.htm

May 29, 2003, Tax-News.com, by Mike Godfrey, Connecticut To Ban Offshore Firms From State Contracts
http://www.tax-news.com/asp/story/story.asp?storyname=12060

May 27, 2003, The Telegraph (London), By Alison Steed, Taxman makes accountants see red
http://www.dailytelegraph.co.uk/money/main.jhtml?xml=/money/2003/05/27/cntax27.xml&m enuId=242&sSheet=/money/2003/05/27/ixfrontcity.html

May 27 2003, The Barbados Advocate, Secrecy Soon Over
http://www.barbadosadvocate.com/NewViewNewsleft.cfm?Record=13474

May 21, 2003, GoAsiaPacific.com, Vanuatu agrees to improve tax transparency
http://www.goasiapacific.com/news/GoAsiaPacificBNP_859688.htm

May 20, 2003, Cayman Net News, Protecting Cayman's financial record
http://www.caymannetnews.com/Archive/Archive%20Articles/May%202003/Issue%2039 5%20Fri/Protecting%20Cayman-395.html

May 20, 2003, Strike The Root, by George F. Smith, Thomas Paine, Revolutionary
http://www.strike-the-root.com/3/smith/smith3.html

May 6, 2003, The Telegraph (London), Wealth divides true relationship banking
http://www.telegraph.co.uk/global/main.jhtml?xml=/global/2003/05/06/fibank106.xml&sShe et=/global/2003/05/28/fin_home.html

The Globe and Mail, May. 26, 2003, By Karen Howlett, OSFI targets offshore accounts: Agency to unveil new rules requiring banks to reveal identity of secret clients
http://www.globeandmail.com/servlet/story/RTGAM.20030526.wxrosfi/BNStory/Business/

 

Best regards,

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

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