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Center for Freedom and Prosperity's Weekly Update 1) New Study Exposes Fraudulent Oxfam Calculation 2) Assistant Majority Whip Granger joins list of lawmakers against the EU/OECD "information exchange" plan 3) Heritage Foundation Primer on Tax Competition and Information Exchange 4) Rep. Weldon and Ways & Means Committee Chairman Bill Thomas discuss dangers of IRS regulation 5) Lindsey, Hubbard and Armey Speak Out in Favor of Tax Competition 6) Paul Craig Roberts on financial privacy and information exchange 7) Tax Competition at Work -- Accenture Heads for Bermuda 8) The European Union's anti-privacy Savings Tax Directive 1) New Study Exposes Fraudulent Oxfam Calculation According to a new study released today by the Center for Freedom and Prosperity Foundation (CFPF), Oxfam's assertion that so-called tax havens deprive developing nations of $50 billion per year in tax revenue is completely baseless. Entitled "Oxfam's Shoddy Attack on Low-Tax Jurisdictions," the new report shows that the U.K.-based charity allowed ideology to dictate results. Andrew Quinlan, president of the Center for Freedom and Prosperity Foundation, said of the study, "I hope that this new analysis will undermine the OECD's divide-and-conquer strategy against the developing world. Simply stated, the Oxfam assertion that developing nations are losing $50 billion of tax revenue each year is based on completely phony numbers. I am sure that Dan Mitchell's research and analysis once-and-for-all dispels this myth." Link to executive summary and full report below: Executive Summary and Press Release: Full Study:
Congresswoman Kay Granger of Texas is an Assistant Majority Whip and serves on both the House Budget Committee and the powerful House Appropriations Committee. Rep. Granger joins a long list of lawmakers against the EU/OECD "information exchange" schemes. Rep. Granger wrote: "These international bureaucracies want to force low-tax nations to repeal financial privacy laws so Europe's welfare states can tax income their residents earn in low-tax nations. Yet allowing governments to collect and swap private financial data would create what the House Majority Leader has accurately referred to as a "global network of tax police." The Congresswoman also wrote: "As a member of the appropriations committee, I am particularly concerned that U.S. tax dollars are being used by the OECD to pursue policies that threaten our national interests. We are the world's biggest beneficiary of tax competition, largely because of our attractive tax and privacy laws. Yet these are the types of policies that the OECD seeks to undermine." Congresswoman Kay Granger's letter is linked below:
Dan Mitchell of the Heritage Foundation has published an excellent primer that explains how the OECD and EU are seeking to achieve tax harmonization through the back-door tactic of information exchange. The primer is a must-read for those who would like to understand why the Center is fighting to protect tax competition, financial privacy and fiscal sovereignty. Link below: Backgrounder # 1460, by Dan Mitchell, A Tax Competition Primer: Why Tax Harmonization and Information Exchange Undermine America's Competitive Advantage in the Global Economy:
Congressman Dave Weldon of Florida offered an amendment to the Treasury-Postal appropriations bill that would have blocked the use of funds to implement the proposed Clinton-era IRS regulation on reporting non-resident aliens deposit interest information to their home countries. He later withdrew the amendment after Ways and Means Committee Chairman Bill Thomas said he would consider holding hearings or pursuing legislation if concerns associated with the proposed regulations were not addressed. CFP has been leading the grassroots fight against this regulation from the first day it was introduce. We testified at the IRS open hearing, we organized hundreds of e-mail messages complaining about the regulation, and we sent a Legislative Alert to all Members of congress on the Weldon amendment. We will continue to work with Congress and the Administration to ensure that this misguided-Clinton regulation is withdrawn. Below is a link to Reps. Weldon's and Thomas' discussion on the House Floor: Link to CFP's Dump the IRS Info Sharing Regs web page: News clip: July 27, 2001, Investors Offshore.com (via Tax-News.com), by Carla Johnson, Republicans Vow To Fight NRA Reporting Regulations
On Monday, July 23, the Heritage Foundation, the Cato Institute, and Citizens for a Sound Economy hosted a tax reform seminar on Capitol Hill. The seminar attracted a standing-room only crowd and was national broadcast on C-Span. While most of the discussion focused on tax reform, there was considerable discussion of how international bureaucracies are trying to undermine tax competition. House Majority Leader Dick Armey strongly condemned the OECD initiative. Glenn Hubbard, Chairman of the Council of Economic Advisors, said that the Bush Administration strongly supports tax competition. Larry Lindsey, the President's chief economic advisor, discussed the threat that information exchange poses to human rights. The OECD and EU proposals also were criticized by Dan Mitchell of the Heritage Foundation and Grover Norquist of Americans for Tax Reform.
Paul Craig Roberts, a leading conservative columnist and former Treasury official, has written two insightful columns on the growing battle over financial privacy and information exchange. Links to his two articles below: July 19, 2001, Taxing Away Freedoms, by Paul Craig Roberts July 25, 2001, Democrats Chase After Runaway Tax Slaves, by Paul Craig Roberts
How will U.S. lawmakers react? Will they pass laws that hurt the American people by punishing companies that move to jurisdictions with more favorable tax policies, or will they pass laws that make the U.S. more competitive. Only time will tell. July 23, 2001, Accountingweb.com, Accenture Heads for Bermuda - and Freedom July 21, 2001, Chicago Tribune (via Tax-News.com), Consulting Giant Accenture Leads Parade of Firms Moving on Paper to Bermuda
While the Center has primarily focused on the OECD's so-called "harmful tax competition" initiative, the European Union's information-exchange initiative may be the greater danger. The Center already has been educating lawmakers about this proposal – which is contingent upon participation of non-EU nations like the U.S. and Switzerland. Dan Mitchell's primer, discussed above, explains why information exchange is a misguided notion. The link below is an EU-produced description of the Savings Tax Directive. The European Commission's new proposal for a Directive dealing with the taxation of savings income:: frequently asked questions Friday, 20 July, 2001, BBC News, US eases stance on 'tax havens' Tax-News.com, July 25,2001, by Ulrika Lomas, Belgium Becoming Europe's Newest Tax Haven July 22, 2001, St. Petersburg Times, by Robyn E. Blumner, Government has its eye on your money Best regards, Andrew Quinlan
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