 |
|
|
|
|
||
 |
||||||
 |
||||||
 |
||||||
|
||||||
|
|
|
|
|
|
|
 |
||||||
|
Center for Freedom and Prosperity's E-mail Update 2) Coalition Seeks "Immediate" Withdrawal of IRS Interest Reporting Rule 3) Individual Letters from Free Market Groups to IRS on Proposed Regulation 4) Two More U.S. Congressmen Oppose Misguided IRS Rule 5) SBA Opposition to IRS Rule: Off. of Advocacy of the U.S. Small Business Admin.Objects 7) SBSC`s Raymond J. Keating: The Dangers of Killing International Tax Competition 9) Quinlan and Mitchell Coming to Bermuda 10) Mitchell in Miami and Lithuania 12) Return of the Undead: Tax Harmonization on EU agenda 13) The OECD's Next Assault on Financial Privacy 14) Mitchell & de Rugy: On former-IRS Commissioner Rossotti Departure from the Service 15) WSJ: It's the Economy, Schroeder 16) Heritage Foundation's President Edwin Feulner: Shelter from the Storm 17) John Fonte: Liberal Democracy vs. Transnational Progressivism 18) Harvard Business School: Academic survey of firms and tax competition 19) Richard W. Rahn: Bush is on right track 20) CF&P Clips
There is a downside to being productive. As you can see, our updates are becoming very long. But this does demonstrate continued progress in the battle for economic liberalization. Our key short-term goals remain the same: Block the IRS's illegal regulation; Keep the EU savings tax directive in the grave; And protect the rights of companies to expatriate until American tax law is fixed. Make sure you check out CF&P's dedicated web pages on our major issues. All the information in each e-mail update is separated by topic for easier reference in the future. Below are links to all the dedicated pages: Tax Competition European Union's Savings Tax Directive IRS's Information Sharing Regulation Corporate Inversion United Nations Tax Grab This Thursday, I will be testifying before the IRS against their proposed regulation that forces banks to report interest paid to non-resident aliens. I will be joined by several other free-market groups and some of the affected banks. We are working overtime to kill this misguided rule. If you have any thoughts on these updates and/or some of the issues we are working on,, please feel free to share them with us. Best regards, AQ
2) Coalition Seeks "Immediate" Withdrawal of IRS Interest Reporting Rule [Excerpt from Tax-News.com] A powerful grouping of US interests opposed to the measure - the Coalition for Tax Competition - has written to Treasury Secretary Paul O'Neill strongly criticising the proposal, as have many Congressmen and prominent academics and associations in the last few months. Commenting on the letter (shown below), Andrew F. Quinlan of the Center for Freedom and Prosperity said: "The free-market groups represented on this letter are President Bush's strongest supporters. It would be a major blunder if the Administration failed to withdraw this ideologically motivated IRS regulation - especially since a significant amount of capital investment will flee the U.S. economy if it is implemented." Dan Mitchell of the Heritage Foundation said: "The widespread opposition to the IRS regulation should be a wake-up call for Treasury. A Republican Administration should not be putting the demands of foreign tax collectors above the interests of the American people." While Veronique de Rugy of The Cato Institute says: "The IRS is undermining the rule of law by using the regulatory process to overturn legislation approved by Congress. Treasury Secretary O'Neill should withdraw this regulation if he is loyal to President Bush." [Link to full article below:] November 15, 2002, Tax-News.com, US Tax Coalition Attacks IRS Over Interest-Reporting Proposals Coalition for Tax Competition Letter to Treasury Secretary Paul O'Neill: CTC Press Release on letter:
3) Individual Letters from Free Market Groups to IRS on Proposed Regulation Leading free-market organizations sent comment letters to the IRS opposing the proposed rule that forces banks to report interest paid to non-resident aliens to their home counties. The list of groups include CF&P, Cato, Heritage Foundation, ATR, Empower America, IRET, SBSC and CEI. Link to these and other letters below: Link to Selected Comment Letters on the IRS's Interest Reporting Regulation: November 14, 2002, Tax-News.com, US Groups Attack IRS Over NRA Reporting Rules November 11, 2002, Tax-News.com, Congressional Committee Chairman Complains Interest Reporting Measure To IRS
4) Two More U.S. Congressmen Oppose Misguided IRS Rule A) Jack Kingston: House Appropriations Committee Member Says "Proposed [Interest Reporting] Rule is a Misallocation of IRS Resources, and it Will Impose Significant Costs on Banks if it is Implemented." [Excerpt from Mr. Kingston's Letter:] B) Ron Paul: Financial Services Committee Member Asks IRS to Pull Proposed Interest Reporting Rule [Excerpt from Mr. Paul's Letter:] "If this regulation is not withdrawn, it will create uncertainty among international investors. Many of them will react by placing their funds in foreign institutions, thus undermining the
competitiveness of US banks. This regulation is particularly ill-timed given the recent downturn in the US economy." [Link to full letter below:] News Clip: BNA: Pressure Builds for IRS to Withdraw Rules On Nonresident Alien Interest Reporting [Excerpt – See www.bna.com for full article] "Two more congressmen and several interest groups have asked the Internal Revenue Service to withdraw reproposed regulations (REG-133254-02) that would require U.S. banks to report interest paid to nonresident aliens from 16 countries. "Reps. Jack Kingston (R-Ga.) and Ron Paul (R-Texas) urged IRS to dump the rules despite the fact the administration cut back an earlier proposal (REG-126100-00) that would have required reporting for banks in 150 countries (11 DTR G-8, L-10, 1/17/01). "'These cosmetic changes in no way alter the regulation's destructive nature,' Paul said in a Nov. 13 letter to Alexandra Helou in the office of IRS associate chief counsel (international). 'Instead of attracting capital into the financial system, this regulation could drive billions in capital out of the U.S. economy.' "Kingston called the reproposed rules 'a major lapse in judgment' on IRS's part, and said the agency appears to be attempting to unilaterally overturn nonintrusive congressional tax policy toward foreign-owned bank accounts. "'This proposal is a misallocation of IRS resources and it will impose significant costs on banks if it is implemented,' Kingston told Helou in a Nov. 14 letter. . ." "Three private-sector interest groups also complained to the Bush administration about the reproposed rules in recent letters. The Coalition for Tax Competition, a group of about 30 companies and associations, said it believes the IRS is abusing its regulatory authority and the reproposed guidance is in conflict with congressional intent in this area. "In a Nov. 13 letter to Treasury Secretary Paul O' Neill, the coalition argued that the rules will drive investment out of the economy and make U.S. banks less competitive. . ." "U.S. Financial Interest Questioned . . . 'Since nonresident alien interest payments on U.S. deposits are not subject to tax, IRS would not further any U.S. financial interest by requiring this new reporting,' the association said. Grover Norquist, director of Americans for Tax Reform, also weighed in, asserting that 'unfortunately, like Frankenstein's monster, this regulation has been stitched together again and reanimated. It was a uniquely lousy idea before, and narrowing its focus by concentrating this most recent effort on residents of 'only' 15 countries makes it no less objectionable.' "In a Nov. 11 letter to IRS Deputy Commissioner Robert Wenzel, Norquist argued that 'successfully imposing this regulation on these unlucky 15 will make it easier to regulate everyone else at a later (but not too distant) juncture.''' [Source: November 18, 2002, Bureau of National Affairs, By Alison Bennett, Pressure Builds for IRS to Withdraw Rules On Nonresident Alien Interest Reporting, www.bna.com]
5) SBA Opposition to IRS Rule: Office of Advocacy of the U.S. Small Business Administration Objects [Excerpt from Tax-News.com article:] The IRS initially claimed that it had no need to file an economic impact statement on the information reporting measure - a laughable proposition when almost everyone agrees that the rules will have a disastrous impact on the US banking sector. But now the Office of Advocacy of the US Small Business Administration has insisted that the IRS will have to publish a statement. [Full article below and link to letter:] Office of Advocacy of the U.S. SBA's Letter November 22, 2002, Tax-News.com, by Mike Godfrey, US Small Business Administration Tilts At IRS Interest Reporting Rule
6) Another Victory in the Fight to Stop Fiscal Protectionism and Corporate Inversion Irrational Behavior After several weeks of intense lobbying, the Center for Freedom and Prosperity was able to help Congress almost completely emasculate the anti-inversion provision in the final Homeland Security Bill. A waiver was added to the Section of the bill that prohibited government contracts with corporations that relocated offshore. The Treasury Secretary now has the authority to waive this restriction if "The Secretary determines that the waiver is required in the interest of homeland security, or to prevent the loss of any jobs in the United States or prevent the Government from incurring any additional costs that otherwise would not occur.." This is a victory, but only a temporary one since several left-wing members of Congress have pledged to revisit this topic next year. CF&P will use the intervening time to continue to educate Congress, the media and all Americans on why companies should not be punished for doing the right thing for shareholder, workers, consumers and taxpayers. News Clips November 22. 2002, The Royal Gazette, By Luke O'Brien, Republicans: Controversy is symptom of wider tax issue November 19, 2002, Tax-News.com, by Mike Godfrey, Temporary US Tax Laws Just 'Window Dressing', Complains Neal November 15. 2002, The Royal Gazette, By Lilla Zuill, Contracts break for tax dodge companies November 15, 2002 , OffshoreOn.com: US Tax Policies Lead to Corporate Inversions November 14. 2002, Dow Jones, Treasury's Dam Says International Tax Rules Hurt US Businesses November 14. 2002, The Royal Gazette, By Lilla Zuill, Fresh US assault on 'Bermuda tax dodges' November 14, 2002, Tax-News.com, by Mike Godfrey, IRS Moves Against Newly Inverted US Companies November 13, 2002, The New York Times, By David Cay Johnston, New Rules Order Companies to Disclose Offshore Moves
7) SBSC`s Raymond J. Keating: The Dangers of Killing International Tax Competition [Excerpt] Now, tax competition serves as a critical check on government's growth. Particularly in a world made dramatically smaller due to technological advancements, nations cannot afford to let taxes creep too high. Countries that limit the growth of government, limit the reach of regulations, and keep taxes low enjoy a competitive advantage in terms of attracting both labor and, especially, capital. Obviously, nations that subject citizens and businesses to the burdensome costs of big government don't much like this global economic reality. They'd rather not compete when it comes to issues like relative tax burdens. So, why not try to change economic reality with an international standard for taxation? Indeed, a kind of fiscal protectionism – whereby high tax, big spending governments would be shielded from the economic consequences of their policies -- underpins tax harmonization schemes recently proposed by leading international organizations. [Link to Full article below:] November 13, 2002, Small Business Survival Committee`s Weekly Cybercolumn: The The Entrepreneurial View #214, by Raymond J. Keating, The Dangers of Killing International Tax
Competition
8) Mitchell editorial defends competitive bidding…argues that taxpayers should benefit from lower-cost goods and services provided by foreign-based firms. [Excerpt]
9) Quinlan and Mitchell Coming to Bermuda Andrew Quinlan of the Center for Freedom and Prosperity and Dan Mitchell of the Heritage Foundation will be in Bermuda from December 10th-13th. We are speaking at the Bermuda International Business Association's Annual General Meeting on Thursday, December 12th. Please contact us if you are interested in getting together to chat about tax competition, U.S. tax reform plans, corporate inversions, hedge funds, re-insurance or any of the other issues we are working on in Washington. We will be staying at the Fairmont Hamilton Princess Hotel.
10) Mitchell in Miami and Lithuania The Heritage Foundation's Dan Mitchell will be speaking next Tuesday, December 3, at the Caribbean/Latin American Action annual conference. You can contact Dan via e-mail () if you are interested in meeting. Dan also will be speaking next week in Lithuania, at a tax reform/tax competition conference organized by the Lithuanian Free Market Institute. If any of our European friends plan to be at the conference, feel free to contact Dan.
11) Former House Speaker Bob Livingston: Cayman Islands and the U.S. should stand shoulder to shoulder in opposition to the EU's Savings Tax Directive. Bob Livingston: "It's a very strenuous position when one has to deal with the issues of capital flow, particularly attempts to restrict capital flow. In the short run it (EU Draft Savings Directive) will surely hurt the Cayman Islands but in the long run it will surely hurt the United States. It will happen quicker in the Cayman Islands, but once you start restricting the flow of capital you make investors uneasy. They may believe that there is the likelihood that they will not get their money back so they will pull their money out and put it somwhere where they don't have to worry." . [Link to Full article below:] November 26, 2002, Tax-News.com, by Mike Godfrey, Cayman and US Should Stand Together Over EU Savings Tax Directive November 29, 2002, Tax-News.com, by Amanda Banks, Cayman Leader Promises To Challenge UK Over Savings Tax Directive November 22, 2002, The Wall Street Journal Europe, by Paul Hofheinz in Brussels and Glenn Simpson in Washington, Tax Havens Revolt: U.K.'s Caribbean Colonies Ignore Government Order
To Disclose Account Data Additional EU News Clips: November 29, 2002, Tax-News.com, by Ulrika Lomas, EC Prepared To Compromise With Swiss Over Banking Secrecy November 29, 2002, Tax-News.com, by Ulrika Lomas, New Study Calls For Direct EU Taxation November 19, 2002, Tax-News.com, by Amanda Banks, Cayman To Stand Firm Over EU Savings Tax Directive November 15, 2002, OffshoreOn.com: Swiss and EU Negotiate Savings Tax Proposal November 11, 2002, Tax-News.com, by Jason Gorringe, Pierre Horsfall Says Tax Talks With UK Now 'Cordial' November 8, 2002, Washington Post, By Keith B. Richburg, The EU and the Power of the People: Czech and Other Leaders Are Eager to Join, but Their Citizens Aren't So Sure
12) Return of the Undead: Tax Harmonization on EU agenda Regular readers of the Center update will not be surprised to hear that the high-tax nations in Europe are making a new push for tax harmonization. Specifically, they want to scrap the European Union "national veto" so that high-tax nations can out-vote Ireland, the United Kingdom, Austria, and Luxembourg. This is a major threat to those nations, and also a big danger for countries that are considering membership in the Brussels-based super-state. [Excerpt] Mr Giscard d'Estaing, who heads the convention, also warned that countries failing to ratify the draft constitution could end up outside the European Union. The former French president identified a growing consensus within the convention for scrapping the national veto on fiscal issues that could distort the EU's internal market. [Link to full article below:] November 10, 2002, Financial Times, By Daniel Dombey and George Parker, Giscard says tax harmonisation on EU agenda November 11, 2002, Tax-News.com, by Ulrika Lomas, Giscard Threatens Tax Harmonisation In New EU Constitution
13) The OECD's Next Assault on Financial Privacy Our old friends in Paris also have been busy. They now want to impose a one-size-fits-all regulatory scheme on business formation. This is an attack on jurisdictions with efficient incorporation procedures. The Center plans to kill this misguided scheme, particularly since it is a direct assault on the business-friendly incorporation policies of U.S. states like Nevada, Florida, and Delaware. [Link to full article below:]
14) Mitchell & de Rugy: On former-IRS Commissioner Rossotti Departure from the Service A) Mitchell: Good Riddance, Rossotti [Excerpt] But by the time Rossotti resigned on Election Day 2002, the prevailing sentiment was more or less: "Good riddance." Consider a few of his accomplishments. On his watch, the IRS reinstated its infamous "lifestyle audits." It began hounding credit-card companies to compromise the privacy of their clients. And it sought to help foreign governments tax their citizens on money kept in American banks. All things considered, Rossotti demonstrated an unwelcome urge to pry, a disturbing disregard for the protections afforded by our Constitution and immoderate indifference to the impact of his actions on the U.S. economy. (You know the situation's bad when it seems you'd be better off with a lawyer.) [Link to full article below:] November 20, 2002, The Heritage Foundation, by Dan Mitchell, Good Riddance, Rossotti B) De Rugy: Time to Tame the Tax Police: We need an IRS commissioner who knows the law. [Excerpt] Rossotti's legacy certainly is disappointing. For instance, he is responsible for issuing a regulation to help foreign governments tax income earned in America. This misguided initiative, which would require U.S. financial institutions to automatically report the interest paid to foreign investors, is contrary to U.S economic interests. Faced with a loss of privacy, foreigners will take their money out of American banks, meaning less loan money available for families and businesses. And since the information the IRS wants to collect is not needed to enforce U.S. tax law, it seems fair to ask whose interests the commissioner was serving. [Link to full article below:] November 15, 2002, National Review Online, By Veronique de Rugy, Time to Tame the Tax Police: We need an IRS commish who knows the law.
15) WSJ: It's the Economy, Schroeder [Excerpt] In particular, the newly re-elected Mr. Schroeder is going after one of the few havens of relative tax-freedom in tax-heavy Germany -- long-term capital gains. [Link to full article below:] November 20, 2002, WSJ: Opinion Journal, Editorial Page, It's the Economy, Schroeder Additional articles: November 18,2002, BBC News, Schroeder warned over higher taxes November 17, 2002, Washington Post, By Peter Finn, Hit Song Taxes German's Patience: Parody Mocks Schroeder on Economy
16) Heritage Foundation's President Edwin Feulner: Shelter from the Storm [Excerpt:] The income-tax system began in 1913 as a two-page form backed by 14 pages of law. Today, we struggle with 742 different forms and 254 separate publications, backed by more than 17,000 pages of law. Clocking in at close to six million words, the tax code is more than seven times longer than the Bible. [Link to full article below:] October 30, 2002, The Heritage Foundation, by Edwin J. Feulner, Shelter from the Storm
17) John Fonte: Liberal Democracy vs. Transnational Progressivism: The Future of the Ideological Civil War Within the West The following article by John Fonte appeared in Orbis magazine in the Summer Issue, 2002. [Excerpt:] The NGOs included the Leadership Conference on Civil Rights, Amnesty International-U. S.A. (AI-U.S.A.), Human Rights Watch (HRW), the Arab-American Institute, National Council of Churches, American Friends Service Committee, the National Association for the Advancement of Colored People, the American Civil Liberties Union, the Mexican-American Legal Defense and Educational Fund, the International Human Rights Law Group, the Lawyers Committee for Civil Rights under Law, and others. Their spokesman, Wade Henderson, of the Leadership Conference on Civil Rights, stated that the NGOs' demands "had been repeatedly raised with federal and state officials [in the United States] but to little effect. . . . In frustration we now turn to the United Nations."2 In other words, the NGOs, unable to enact the policies they favored through the normal processes of American constitutional democracy-the Congress, state governments, state courts, the federal executive branch, or even the federal courts-felt it necessary to appeal to authority outside of American democracy and beyond its Constitution. [Link to full article below:] Summer 2002, Orbis, by John Fonte, Liberal Democracy vs. Transnational Progressivism: The Future of the Ideological Civil War Within the West
18) Harvard Business School: Academic survey of firms and tax competition It is an article of faith – among politicians as well as scholars – that government policies have the potential to influence the extent and nature of economic activity, particularly when policies impede the normal functioning of business. Examples include regulatory regimes that discourage business formation, legal systems and institutions that make it difficult to execute and enforce commercial contracts, and tax systems that impose excessive burdens on income-producing activities. The desire of most governments to attract foreign direct investment (FDI) directs special attention to the way in which policies affect the location and activities of multinational firms. The purpose of this paper is to consider the impact of taxation on FDI, emphasizing the effects of tax differences within regions (Europe in particular), and the behavior of FDI financed through chains of ownership. The effect of taxation on FDI has received considerable prior attention in the economics literature, where there is an emerging consensus that taxation strongly influences both the volume of FDI and the operational behavior of multinational firms. The evidence suggests that high tax rates discourage FDI not only by depressing after-tax investment returns but also by changing the opportunities available to firms that have discretion in reporting the location of taxable income. [Link to full study below:] Published in 2002, Harvard Business School, By Mihir A. Desai, C. Fritz Foley & James R. Hines Jr., Chains of Ownership, Regional Tax Competition, and Foreign Direct Investment
19) Richard W. Rahn: Bush is on right track [Excerpt] It will likely include a reduction in the double taxation of dividends. Critics, because of economic ignorance or demagogy, will claim this benefits only rich corporations and stockholders. What they ignore is that the taxes corporations collect for the government come from the pockets of their customers, workers and shareholders. U.S. corporate-tax rates are among the highest in the world, because our international competitors have been reducing theirs. The tax on each dollar of corporate earnings often exceeds 70% when federal and state corporate taxes and personal income taxes on dividends are added up. These heavy taxes make the cost of investment capital much higher for U.S. firms than for many of their foreign competitors. [Link to full article below:] November 7, 2002, USA Today, By Richard W. Rahn, Bush is on right track
November 29, 2002, Tax-News.com, by Amanda Banks, World Bank Commissions Study On Needs Of Eastern Caribbean Economies November 26, 2002, The New York Times, By Edmund L. Andrews, U.S. to Seek to Abolish Many Tariffs November 26, 2002, Tax-News.com, by Jason Gorringe, Jersey And Guernsey Both Announce Plans To Reduce Corporate Tax To Zero November 26, 2002, The Washington Times, by Lawrence Kudlow, The deficit fandango November 26, 2002, WSJ: Opinion Journal, Editorial Page, The Putin Curve November 26, 2002, The Washington Times, by Arnold Beichman, Anti-Americanism redux abroad November 25, 2002, WSJ: Opinion Journal, By Robert L. Bartley, Permanent, Marginal, Immediate: There's three things to remember about stimulative tax cuts. November 25, 2002, Tax-News.com, $6bn Withholding Tax Goes Unreclaimed, Says GOAL November 18, 2002, Tax-News.com, by Mike Godfrey, United States Withdraws Money Laundering Advisory For Niue November 15, 2002, OffshoreOn.com: US Treasury Issues New Disclosure Rules for Tax Shelters November 14, 2002, The New York Times, By William Safire, You Are a Suspect November 14, 2002, AFX News, US' Dam says Bush adminstration to work on international corp tax overhaul November 14, 2002, The Nassau Guardian (Bahamas), By Lindsay Thompson, OECD pressures ahead November 13, 2002, Tax-News.com, by Mike Godfrey, Hong Kong Named Freest Economy For Ninth Year Running November 12, 2002, The Washington Post, By Brian Krebs, State Coalition Approves Internet Sales Tax Plan; Prospects in Legislatures, GOP Congress Uncertain November 12, 2002, Online Pravda, Money Circulation in the World: Britain and Germany invest in Russia, but Russia invests in America November 12, 2002, The Heritage Foundation, 2003 Index of Economic Freedom November 12, 2002, International Herald Tribune, By Peter Eigen, Multinationals' bribery goes unpunished November 9, 2002, The New York Times, By David Cay Johnston, A Busy Week for the U.S. in Its Pursuit of Tax Rebels November 2002, Portfolio International, UK tax burden on the rise – OECD report October 29, 2002, OffshoreOn.com: Money Laundering is a Growth Industry
Best regards, Andrew Quinlan __________________________ Did you like what you just read? If so, consider contributing to the Center for Freedom and Prosperity at: Do you have a friend who might be interested in our e-mails? If so, forward it to them, or have them join our list at:
|
||||||
 |
||||||