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February 10, 2004 ~ 6:32 p.m., Dan Mitchell Wrote:
Who are the Real Tax Havens? A new article ("US Multinationals Move
More Profits to Tax Havens," Tax Analysts) makes a "shocking" discovery that companies are more likely to earn
money and report profits in jurisdictions with better tax law. Interestingly, six of the the top ten tax havens listed in the article are OECD member nations - led by the Netherlands and Ireland. Yet none of these
nations were placed on the OECD blacklist in 2000. Hong Kong and Singapore also are among the top ten tax havens listed in Martin Sullivan's article, yet they conveniently did not get labeled as "tax
havens" by the OECD either. According to the old saying, "sauce for the goose is sauce for the gander," but notions of fair play and equality apparently get overlooked when tax-free bureaucrats in
Paris put together blacklists to help prop up high-tax welfare states. (no link available)
February 10, 2004 ~ 1:14 p.m., Andrew Quinlan Wrote:
Richard Rahn of the Discovery Institute has an excellent editorial in the Washington Times. He explains how low-tax jurisdictions benefit the global economy by ensuring the efficient allocation of capital. Equally important, he shows why so-called tax havens are among the world's leaders in fighting against dirty money.
http://www.washtimes.com/commentary/20040209-090310-4341r.htm
February 10, 2004 ~ 12:017 p.m., Dan Mitchell Wrote:
EU Savings Tax Directive Death Watch: Another news story, this one from the eupolitix.com news service, reveals
that the proposed savings tax cartel is in deep trouble. The most interesting question, though, is whether EU ministers will ignore all these problems and pretend that the Directive's requirements have been met. We
won't know until June, but I'm guessing that they will decide that the Directive can move forward. After all, who has an incentive to point out that the Emperor has no clothes?
http://www.eupolitix.com/EN/News/200402/875c969a-1812-46b6-a4f8
-176cd498d3cf.htm
February 10, 2004 ~ 4:04 a.m., Dan Mitchell Wrote:
Can communists favor free market tax policy? Apparently. Tax-News.com is reporting that China is poised to embark on supply-side tax reforms. This shows that anything is possible when tax competition is allowed to flourish. As the following quote indicates, Chinese political leaders have a better understanding of economics than most politicians in the West:
"We feel that only through simplifying things and lowering tax
rates will revenue collection become more efficient. At the same
time, we also want to give fuller play to companies," observed
Deputy Finance Minister Lou Jiwei in an interview published in the
Wall Street Journal last week. He also explained that the
government wants to take more of a back seat role in fueling
economic growth. "It's a lot like Reaganomics," the Deputy
Finance Minister noted.
http://www.tax-news.com/asp/story/story.asp?storyname=15000
February 9, 2004 ~ 6:44 p.m., Dan Mitchell Wrote:
The Financial Times today had an article ("Stalemate in EU talks with tax havens") describing how the
infamous savings tax directive is in trouble. The money quote:
Frits Bolkestein, the EU's commissioner for the single market, is
expected to tell EU finance ministers on Tuesday that insufficient
progress has been made in recent negotiations with
Liechtenstein, Andorra, San Marino and Monaco to reach a deal
on sharing information and introducing withholding taxes. "It's a
case of nobody wanting to make the first move," an EU official
said.
This is encouraging news, but it completely overlooks the fact that Bush
Administation officials already have announced that the United States will not participate in the cartel. The EU pretends this problem doesn't exist by falsely claiming that the US already is in compliance (see http://www.freedomandprosperity.org/Papers/lpf/lpf.shtml for more information), but one wonders if the Europeans really intend to move forward with this cartel when it will lead to a massive outflow of capital from Europe to the United States and the Far East.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT
/FullStory&c=StoryFT&cid=1075982371869
February 9, 2004 ~ 5:59 p.m., Dan Mitchell Wrote:
The OECD and EU get most of the attention, but they are not the only international bureaucracies seeking to hinder tax competition. The UN's "Panel Discussion on International Cooperation in Tax Matters" issued a report late last year that is so radical that the OECD and EU almost seem reasonable by comparison. Here are the juicy quotes from the
recommendations section:
"The most appropriate forum for cooperation in international tax
matters and exchange of tax information will be achieved through
an United Nations intergovernmental commission or committee.
As recommended by the Secretary-General..., the Ad Hoc Group
of Experts on International Cooperation in Tax Matters should be
strengthened through its conversion into such a body....A new UN
Committee or Commission on International Cooperation on Tax
Matters, assisted by a competent secretariat, should help
...monitor macroeconomic policies affecting tax policy and
international taxation. It could also contribute to the restraining of
tax competition to attract foreign direct investment, develop a
mechanism for multilateral sharing of tax information with a view
to curbing tax avoidance, tax evasion and capital flight, as well as
engaging in tax arbitration procedures."
This may sound too aburd to ever happen, but high-tax welfare states and third world kleptocracies have a joint interest in tax
harmonization. Sound like an unholy alliance.
http://www.un.org/esa/ffd/1003CRP_on_tax.pdf
February 9, 2004 ~ 5:15 p.m., Dan Mitchell Wrote:
The Economic Report of the President was released today and it contains the usual array of sound analysis, but supporters of tax competition will be especially pleased by Chapter 13 ("International Capital Flows"), which states that "Exposure to international capital markets and the resulting increased competition may induce governments and firms issuing assets to improve macroeconomic policy, management, and profitability." The chapter also notes that, "Countries with sound macroeconomic policies are in the best position to reap the benefits of capital flows and minimize the risks."
http://a257.g.akamaitech.net/7/257/2422/09feb20040900/www.gpoac
cess.gov/usbudget/fy05/pdf/2004_erp.pdf
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