Prosperity Institute Outlines International Tax Agenda For US

Tax-News.com, Washington

08 April 2002

The Washington-based Prosperity Institute's Task Force on Information Exchange and Financial Privacy says in a new report that the US ought to take the lead in forming an international Convention on Privacy and Information Exchange, and argues strongly against UN and OECD attempts to harmonise international taxation.

"Current US policy on the sharing of financial information with other nations fails to protect the security of the American people, while damaging the financial privacy rights of individuals," said former US Senator Mack Mattingly, Chairman of the Task Force. "Current safeguards are insufficient to prevent information from being used by parties hostile to US security interests, or for inappropriate commercial, political, civil, tax or other purposes. An international convention on this critical issue is long overdue."

According to the Report, information, including financial information, about terrorists and criminals should be routinely shared between the US and reliable democratic countries. To achieve this goal, the Task Force recommends that the United States take the lead in forming an international Convention on Privacy and Information Exchange, which would streamline and improve the exchange of information for law enforcement and anti-terrorism purposes. The Convention would also establish, under international law, enforceable restrictions on the use of shared information, and it would establish a private right of action to enforce individual legal rights.

Members of the Task Force on Information Exchange and Financial Privacy include tax, legal, economic, and law enforcement experts from many leading public policy organizations. The Senior Advisors to the Task Force include the Hon. Jack Kemp (former Republican Vice Presidential candidate) and the Hon. Edwin Meese, III (former U.S. Attorney General).

In its newly released Report on Financial Privacy, Law Enforcement and Terrorism, the Task Force also recommends that the US:

• Better target money-laundering laws to reduce the collection of massive amounts of information on people whom the government has no significant reason to suspect of unlawful activity, in order to focus on those who are truly believed to be potential risks;
  
  
• Withdraw the proposed interest reporting regulation, which is unnecessary to enforce U.S. tax law, and is likely to cause substantial amounts of needed foreign capital to leave the US;
  
  
• Oppose the creation of a United Nations International Tax Organization, which could result in private information on U.S. nationals being provided to hostile and repressive governments, and denial of other basic liberties;
  
  
• Oppose the OECD Harmful Tax Competition initiative, which would unjustly punish small low tax countries for adopting the same policies as the US and would result in the unrestricted disclosure of private financial and tax information to countries that may misuse such information;
  
  
• Modify the US Treasury's qualified intermediary (QI) rules that unnecessarily discourage foreign investment into the US, are excessively complex, and require information not needed to enforce US law;
  
  
• Reject the European Union's Savings Tax Directive that would violate due-process and other legal protections and cause some capital flight from the US.

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