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What is the Center for Freedom and Prosperity? What are the activities of the Center for Freedom and Prosperity? What type of tax system does the Center support? What is wrong with the OECD proposal? What is the Center for Freedom and Prosperity? The Center is a non-profit organization that was created in October 2000, to defend the principles of tax competition, individual freedom, financial privacy, and fiscal sovereignty. The Center is a 501(c)4 organization under American tax law, meaning that it is permitted to lobby Congress but contributions are non-deductible.
Why was the Center created? Globalization is making it harder for governments to maintain oppressive fiscal policies since taxpayers now have more ability to shift economic activity to jurisdictions that welcome private sector wealth creation. High-tax governments have responded to this competitive pressure by using institutions such as the Organization for Economic Cooperation and Development as vehicles to eliminate tax competition, financial privacy, and fiscal sovereignty. While the Center's charter allows the organization to become involved in a wide range of issues that impact individual freedom, the need to protect taxpayers from the OECD served as the impetus for the Center's creation.
How is the Center financed? The Center for Freedom and Prosperity is funded by individual and institutional donations from around the world. To preserve our independence, we only accept unrestricted contributions, meaning that donors have no control over how the money is spent. As such, we expect and hope for support from those who believe in lower taxes, individual freedom, financial privacy, and fiscal sovereignty. We do not take money from those who seek private benefit or from those who have acquired money through immoral means. As a matter of principle and practice, the Center protects the identity of donors to the full extent of the law.
What are the activities of the Center for Freedom and Prosperity? The main role of the Center is to educate lawmakers, business leaders, journalists, and other interested individuals about the benefits of tax competition, individual freedom, financial privacy, and fiscal sovereignty. The Center also seeks to promote legislation that advances these principles and thwart legislation that is contrary to these values.
What type of tax system does the Center support? The Center for Freedom and Prosperity believes that tax burdens should be modest and that tax systems should be fair and neutral. As such, a low-rate non-discriminatory system like the flat tax is the ideal method of collecting revenue. In addition to the economic benefits that such a system would produce, there are two other very important features of a flat tax. First, the flat tax is territorial, meaning that the government would not try to tax income earned in other countries. This means that a flat tax respects the fiscal sovereignty of other nations to determine how to tax the income that is earned inside their borders. Second, a flat tax is conducive to financial privacy. Income that is saved and invested is not subject to double taxation and there is no tax on either the sale of assets or the transfer of assets. Combined with the fact that capital income would be taxed at the source rather than at the individual level, this means that there no longer would be a need for government to know either the type of assets or the amount of assets that a taxpayer owns.
What is wrong with the OECD proposal? The OECD is seeking to make it possible for governments to tax income earned outside their borders (a "worldwide" tax regime). In particular, many high-tax OECD nations assert the right to double-tax capital income earned in other nations. This is bad tax policy, especially since it largely would destroy tax competition as a liberalizing force in the world economy. While a worldwide tax system would lead to higher tax burdens, it also is misguided because it creates conflicts between countries. A worldwide system, after all, requires all nations to eliminate financial privacy laws so foreign tax collectors can search for individual and business taxpayers that have a connection with another country. Indeed, this is why the OECD has branded jurisdictions with low taxes and financial privacy as "tax havens" and is threatening them with financial protectionism. In order for the OECD tax cartel to be successful, all nations must participate. |
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