CFP Mounts Meetings Blitz In Washington

by Mike Godfrey, Tax-News.com, New York

15 January 2002

The Washington-based Centre for Freedom and Prosperity is continuing its crusade against tax harmonisation initiatives from the EU, the OECD and the UN, as well as the IRS proposal to require reporting of bank deposit interest paid to non-resident aliens.

CFP reports having had 37 meetings on Capitol Hill last week, and expects to clock up another 40 this week, all aimed at educating legislators to understand the adverse impact of the multilateral and IRS schemes on the US economy.

Says the Centre's most recent report: 'CFP has been leading the international fight to stop the OECD and EU. We have been quite successful in educating Washington lawmakers and policy makers. Many news sources have credited us with bringing the importance of this issue to the attention of the Bush Administration. We like to think that it was a collective effort by dozens of free-market groups around the world, the seven-dozen lawmakers who sent letters to the Administration, and the leadership of many in the targeted jurisdictions that helped bring this issue to the forefront.

'The proposed IRS regulation on requiring US financial institutions to report interest income to foreign governments would lead to capital flight and have an adverse
impact on the US economy. CFP has been leading the fight against the regulation. We testified before the IRS and led delegations to Capitol Hill and the Administration. We continue to ask the Bush Administration to formally withdraw this last-minute Clinton goodbye kiss to the European Union.

'Why do we care? U.S. banks and financial institutions benefit greatly from the deposits of nonresident aliens. These deposits, in turn, help every American by helping to create jobs, finance small business loans and improve the general welfare of all. For decades, United States lawmakers have understood the importance of attracting capital to America, which is why Congress has chosen not to tax the interest paid on bank deposits of nonresident aliens and not to require the reporting of this deposit income to foreign governments.

'Unfortunately, despite the clear intent of Congress, the Internal Revenue Service is seeking to require the reporting of bank deposit interest paid to nonresident aliens. This information, according to the proposed regulation, would then be turned over to foreign tax collectors. If this happens, deposits will leave U.S. banks and land in Hong Kong, Singapore, Luxembourg and others.'

On the subject of the UN, the CFP has this to say: 'The United Nations (UN) issued a report attacking tax competition and fiscal sovereignty. There are four main recommendations in the report - an international tax organization, global taxes, emigrant taxation, and a back-door form of tax harmonization (information exchange). Every one of these initiatives would undermine individual liberty and encourage statist economic policy. Like the Organization for Economic Cooperation and
Development (OECD) and the European Union (EU), both of which are pursuing similar agendas, the UN seeks to prop up inefficient welfare states by making it difficult for taxpayers to escape oppressive tax systems. Leaders of all low-tax nations, particularly the United States, should block the UN's radical scheme.'

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