Pressure continues to mount on the US administration to distance itself from the OECD's 'harmful tax competition' initiative, and the EU's information-sharing agreement, reached at the Portuguese presidency's Feira summit last December.
Last week more prominent right-wing Americans wrote to Treasury Secretary Paul O'Neill, the Wall Street Journal reprinted in its US edition the article it had run in its European edition the week before, and a slew of pressure groups mounted anti-OECD campaigns.
Colorado Senator Wayne Allard, who serves on the Budget Committee and the Banking Committee, was the first of three Congressmen to speak out last week, saying to Mr O'Neill: 'It is clear that we could suffer a serious loss of capital if the OECD succeeds in rewriting the rules of international commerce and taxation.'
Next came Oklahoma Representative Steve Largent, one of the top conservative voices in Congress and member of the powerful House Commerce Committee, urging rejection of the OECD tax cartel: 'The OECD initiative is bad tax policy, bad trade policy, bad privacy policy, and bad foreign policy. It would insulate profligate governments from market discipline.'
Wisconsin Representative Paul Ryan of the House tax-writing committee also expressed his dissatisfaction with the OECD’s tax competition project. 'The OECD's project is a threat to our national interests, and is also an assault on financial privacy and fiscal sovereignty,' he wrote, 'I strongly urge you to withdraw U.S. support for this initiative. Creating a global network of tax police to support a cartel to benefit high-tax nations is a fundamentally flawed proposition.'
Some twenty senior Republican Representatives and Senators have now written to the Treasury Secretary, and it will be difficult for the administration to ignore their demands when it needs their support so badly to get its budget measures through the divided Congress.
Another powerful Republican figure, Jack Kemp, former Republican Vice Presidential candidate and leading tax reform advocate, has also written to Paul O’Neill on the same subject, making the point that if the US switched to a territorial basis of taxation, as he advocates, then the OECD's campaign would become unnecessary, along with information exchange.
In its article, the Wall Street Journal lays into the OECD and the EU with a vengeance: 'Europe has mounted an intense propaganda campaign (on information exchange) aided by the Paris-based Organization for Economic Cooperation and Development, which is pursuing a parallel "harmful tax competition" initiative. The EU supporters of information exchange often refer to their targets as "money launderers."
'This is not just stretching the truth, but turning it on its ear. It's not cocaine traffickers they're worried about, but their own citizens. When tax burdens approach 60% of income, people flee for their lives.
'Why should other countries be asked to enforce the laws of Germany and France, especially when they do not agree with them?'
Concludes the prestigious WSJ: 'If President George W. Bush does the right thing and says no, he will earn the wrath of European socialists, but make life infinitely better for silent millions across Europe and elsewhere.'
Meanwhile, pro-market and anti-tax think tanks and lobbying organisations
are adding to the anti-OECD clamour - led by the Centre for Freedom and
Prosperity (www.freedomandprosperity.org), the list includes:
Americans for Tax Reform -- Grover Norquist webpage: www.atr.org
CapitolWatch -- Robb Watters webpage: www.capitolwatch.org
Citizens Against Government Waste -- Tom Schatz webpage: www.cagw.org
Club For Growth -- Steve Moore webpage: www.clubforgrowth.org
Competitive Enterprise Institute – F. Smith & R. Rahn webpage:
www.cei.org
Empower America -- Jack Kemp webpage: www.empoweramerica.org
Free Congress Foundation -- Paul Weyrich webpage: www.freecongress.org
National Taxpayers Union -- Eric Schlecht webpage: www.ntu.org
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