Ex-House Leader Lambasts OECD's Tax Policies

by Amanda Banks, Tax-News.com, London

12 June 2003

Addressing a two-day economic forum hosted by the Caymanian Chamber of Commerce recently, Former United States Congressional Leader Dr. Dick Armey was severely critical of the Organisation of Economic Cooperation and Development's (OECD) initiatives to curb 'harmful tax competition' around the world.

The former House majority leader and Texas Republican was the key-note speaker on the last day of the event, which attracted business people and government law-makers from the Cayman Islands, as well as members of prominent think tanks and lobby groups from the United States. Mr Armey was harshly critical of the quasi-governmental manner in which the OECD conducts its affairs, chastising the organisation's "lack of respect for other human beings."

"That is what it amounts to when they decide to take over some parts of our lives…We need to find ways to stand up against this audacity," Armey told delegates.

Dr Armey also argued that it was fundamentally wrong for the national governments of high tax industrial nations and other global organisations to dictate what their citizens can do with their money. He urged low tax jurisdictions, which have been on the receiving end of heavy-handed treatment from the OECD and national governments to resist the tide of outside interference. "If you are for example Caymans, you are to resist them," Amery said. "You ought to boldly tell them about your emotions," he added.

Mr Armey referred to the Patriot Act introduced in 2001, which allows the US authorites to seize funds held in bank accounts as the "Justice Department striving to grab power." He also suggested that the many initiatives aimed at enforcing the disclosure of individual's banking information in the name of preventing crime and money laundering are a smoke screen for government's real intentions - to delve into the private affairs of its citizens.

Armey has long been a staunch opponent of the OECD and other organisations' attempts to eliminate unfair tax competition. During September 2000 whilst House Majority leader, Armey wrote to then Treasury Secretary, Larry Summers urging him to rethink the government's policies on the OECD initiative. In the letter, he stated: "It is not the role of the OECD to tell the United States - or any other member country - how to conduct tax policy, particularly when those changes would increase the tax burden on individuals and businesses."

"Tax competition is a strong factor in both maintaining and increasing the vibrancy of economies across the globe. The OECD is even trying to impose its will on nations that are not members of the organisation, calling for draconian sanctions against so-called tax-havens," the letter continued.

"Adopting the OECD's policy not only represents a major change in tax policy, it hinders our efforts to the US tax burden and reform the US tax code," Armey wrote at the time.

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