Elizabeth Tobias, a tax adviser to House Majority Leader Richard K. Armey, R-Texas, told reporters attending the OECD meeting held in Barbados last week that opposition to the OECD's campaign against tax competition may be growing on Capitol Hill. Tobias was in Barbados as the guest of the Washington-based Center for Freedom and Prosperity (CFP), which played a part in stiffening the resistance shown by Caribbean and Pacific island nations at the meeting towards the OECD's plans.
"I am here to tell you that signs are good that the new administration will not support the OECD's current efforts, but we don't know for sure," Tobias said, explaining that one of the reasons the next administration's stance on tax competition isn't better understood is that the transition team of President-elect George W. Bush got off to a late start because of the contested election results.
Apart from the strongly-worded letter sent by Tobias' boss, Richard Armey, to Laurence Summers, opposing the OECD's 'harmful tax competition' campaign, another sign of Congressional discontent emerged early in January when Ways and Means Committee Member Rep. Sam Johnson wrote direct to the OECD Secretary-General Donald Johnson, saying "I have been following the OECD's campaign against 'harmful tax competition,' and I believe the OECD is focusing on the wrong problem." The letter asked the OECD a series of pertinent questions. The text of the letter is available at http://www.freedomandprosperity.org/Johnson.pdf.
However, an official indication of the position of the new administration is unlikely until George Bush's new team has passed confirmation hearings and settled into office after the President's inauguration next week.
In any event, CFP President Andrew Quinlan believes U.S. lawmakers will never enact meaningful sanctions against the 35 jurisdictions on the OECD tax haven blacklist. "If the blacklisted countries only understand that, they would realize they have no reason to fold before the OECD," he told reporters.
Even if the US holds back from imposing sanctions, nothing prevents other members of the OECD from imposing them, but CFP board member Dan Mitchell, a senior fellow at the Heritage Foundation in Washington says: "I would be extremely surprised if other countries impose sanctions after it becomes clear such measures won't fly in the United States. It is a fact that the United States is the 16-ton gorilla of the global economy. Other industrialized nations would only be shooting themselves in the foot by enacting sanctions without U.S. support for the project. If they did, private capital would simply relocate -- probably to the United States."
Perhaps unsurprisingly, the OECD is said to have exerted pressure to exclude its CFP tormentors from conference sessions in Barbados, although they had been attached to the Antigua and Barbuda delegation as advisers. The CFP now says it will attend forthcoming meetings in London at which the OECD 'peace process' is due to be taken forward in further multilateral sessions.
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