Eduardo Morgan Jr.

“We are writing to you in reference to a “JOINT STATEMENT FROM THE UNITED STATES, FRANCE, GERMANY, ITALY, SPAIN AND THE UNITED KINGDOM REGARDING AN INTERGOVERNMENTAL APPROACH TO IMPROVING INTERNATIONAL TAX COMPLIANCE AND IMPLEMENTING FATCA” (“the Joint Statement,” attached), released on February 8, 2012.  …

https://sites.morimor.com/wp-content/uploads/sites/20/2012/08/Carta-25-julio12-Senadores-al-Tesoro-vs-Fatca-etc.pdf

From The Center for Freedom and Prosperity

I’m not a fan of international bureaucracies.

I’ve criticized the United Nations for wanting global taxes. I’ve condemned the International Monetary Fund for promoting bigger government. I’ve even excoriated the largely unknown Basel Committee on Banking Supervision for misguided regulations that contributed to the financial crisis.

But the worse international bureaucracy, at least when measured on a per-dollar-spent basis, has to be the Paris-based Organization for Economic Cooperation and Development.

American taxpayers finance nearly one-fourth of the OECD’s budget, at a cost of more than $100 million per year, and in exchange we get a never-ending stream of bad policy recommendations.

This Center for Freedom and Prosperity study has all the gory details. The OECD bureaucrats (who get tax-free salaries, by the way) endorsed Obamacare, supported the failed stimulus, and are big advocates of a value-added tax for America.

What’s especially frustrating is that the OECD initially was designed to be a relatively innocuous bureaucracy that focused on statistics. Indeed, it was even viewed as a free-market counterpart to the Soviet Bloc’s Council for Mutual Economic Assistance.

My, how things change.

Perhaps the most odious example of bad OECD policy is the campaign against tax competition. Beginning during the 1990s, the OECD has attacked low-tax jurisdiction for the supposed crime of having good tax laws that attract jobs and capital from high-tax nations such as France and Greece.

So why did the OECD launch this project to prop up Europe’s welfare states?  The answer can be found in an excellent new study from Professor Andrew Morriss at the University of Alabama Law School and Lotta Moberg, a Ph.D student in economics at George Mason University.

It’s a publication designed for academic journals, but it avoids jargon and gibberish, so a regular person can read and understand how the OECD has morphed from a harmless (though presumably still wasteful) bureaucracy into a force for global statism. Here are some of the key findings in the study.

…this transition was in part the result of entrepreneurship by a group of OECD staff, who spotted an opportunity to expand their mission, bringing with it a concomitant increase in resources and prestige. They accomplished this by providing a framework for interests within a group of high tax states to create a cartel that would channel competition in tax policy away from areas where those states had a competitive disadvantage and toward areas in which they had a competitive advantage. …These states then sought to restrict tax competition, which in turn required them to create a means of delegitimizing such competition and by preventing each other from defecting from the cartel by lowering tax rates unilaterally. …The French…realized that single-country financial controls were unworkable within a global financial system.

In other words, the bureaucrats at the OECD and governments from decrepit welfare states like France both saw a benefit in creating a tax cartel.

This “OPEC for politicians” is grossly contrary to good tax policy, international comity, and national sovereignty. But those factors didn’t matter.

Unfortunately, it’s quite likely that we will see further schemes from the OECD and other international bureaucracies. The politicians have learned that transnational cartels increase their power.

…the evolution of the OECD from a facilitator of economic competition to a cartel enforcer represents something new in international organization behavior. …The cartelization of tax policy is an important effort to hold off the impact of the forces unleashed by competition on a more level playing field, but it is certainly not the only one. …If the opportunity is provided, it may be better from a politician’s point of view to form a cartel on taxation as a protection. With a cartel, there are fewer constraints on domestic policy, improving the politicians’ welfare by increasing the degrees of freedom available to satisfy domestic constituents and win re-election.

Needless to say, it is outrageous that the politicians in Washington are sending more than $100 million to Paris every year to subsidize this bureaucracy. For all intents and purposes, we are being coerced into paying for a bunch of European bureaucrats so they can then advocate even bigger government in the United States.

And those bureaucrats get tax-free salaries why pushing for higher taxes for the rest of us!

Can anyone think of a more destructive item in the federal budget, at least when measured on a per-dollar-spent basis? I can’t. That’s why I’ve been fighting the OECD for years, even to the point that the bureaucrats threatened to put me in a Mexican jail for the “crime” of standing in the public lobby of a public hotel.

By Andrew Quinlan

Published on Center for Freedom and Prosperity Foundation 

The Organization for Economic Cooperation and Development (OECD), through its Global Forum on Transparency and Exchange of Information for Tax Purposes, claims that it is working to “ensure that all jurisdictions adhere to the same high standard of international cooperation in tax matters.” CF&P has long pointed out that the OECD’s real objective is to use this supposed “high standard of international cooperation” as a back-door means to protect high-tax jurisdictions by limiting tax competition. To accomplish this the OECD does two things: 1) It attacks low-tax jurisdictions and attempts to saddle them with restrictions reducing their attractiveness to foreign investment and, 2) it hypocritically ignores many of the very same policies it condemns in smaller jurisdictions when they are employed by the larger nations.

https://freedomandprosperity.org/2012/blog/the-oecds-double-standard/

Continue reading (English) The OECD’s Double Standard

Published by Center for Freedom and Prosperity (CF&P)

(Washington, D.C., Tuesday, May 15, 2012) In light of today’s Treasury Department hearing on the Foreign Account Tax Compliance Act (FATCA), the Center for Freedom and Prosperity (CF&P) is again taking the opportunity to call upon Congress to repeal the legislation. As the Treasury Department holds its public hearing today on the next major phase of implementing the draconian new financial reporting requirements, CF&P President Andrew Quinlan offered the following statement:

“Regulators have already pushed the FATCA deadline back once, and still many banks indicate they will be unable to comply in time. The law is unworkable, the requirements unnecessary, and the projected tax revenues much lower than the economic costs. Efforts by Treasury to implement the law without incurring significant economic damage are futile. It is incumbent upon Congress to take action, as only they can completely undo the mess which they created.”

Passed in 2010 as part of the Hiring Incentives to Restore Employment Act, FATCA threatens foreign financial centers with a 30% withholding requirement on US accounts if they don’t comply with draconian new reporting requirements. Citing the added hassle, many institutions have already begun dropping American clients and divesting in US assets, reducing much needed investment in the US economy. With fewer institutions willing to serve them, Americans living overseas are finding it difficult simply to open bank accounts, and are renouncing their US citizenship at a growing rate.

Many of the comments submitted during the comment period noted the excessive costs of implementing FATCA regulations, while also warning of disastrous consequences. The law has made US citizens a toxic liability, and provides a strong incentive for foreign financial institutions to disinvest in the US economy. FATCA’s fiscal imperialism is furthermore creating ill will toward the US.

CF&P has consistently warned of these and other dangers posed by FATCA. In previous letters CF&P has called upon Congress to repeal the law, and is reiterating that position today, while asking for Treasury to conduct a cost-benefit analysis, which would demonstrate the folly of passing, in the name of collecting taxes, laws that extract a higher cost from the economy than are expected to be collected in new revenues.

Alan Winston Granwell
Bruce Zagaris

The Increasing Convergence Among Tax, Criminal, Money Laundering, and Evidence Gathering

Summary:
•Anti-tax haven bills will constantly be appended to appropriations legislation in this Session of Congress and in future ones.
•The lack of actual reciprocity by the US government, as opposed to the rhetoric, may well lead to dispute resolution proceedings with OECD and FATF.
•A global trend towards criminalization of tax compliance and enforcement will continue.
•In this regard, a continuing trend is the convergence of international tax enforcement cooperation with other areas of the law, including criminal law, money laundering, asset forfeiture, and international evidence gathering.
•Despite the growing specialization within tax law, tax enforcement will require increasing knowledge and use of other legal areas due to their increasing convergence.
•International organizations, such as the OECD, will continue their projects on the role of, and accountability for, banks and other financial intermediaries in tax compliance and enforcement.
•There will be a continuing convergence between tax enforcement and cooperation. Hence, the OECD will continue to emphasize exchange of information and cooperation in its tax transparency initiative.
•The emphasis will turn to automatic exchanges of information.
•Disagreements are likely to continue among OECD and developing countries about the proper financial architecture, not only in tax policy, but also financial regulation.
•If possible, the G8 countries will try to continue to centralize decision-making in elite informal groups (e.g., G20, OECD).
•Non-governmental organizations, such as Tax Justice Network (TJN), Global Integrity, Greenpeace, and others are all playing more important roles in international tax enforcement.
•Intermediaries and service providers must take stock of professional rules of conduct, reporting rules, and conflicts in jurisdiction rules to determine which laws apply and do their best to both advise their clients while adhering to the ever-dynamic international compliance and enforcement regimes.

https://sites.morimor.com/wp-content/uploads/sites/20/2012/04/International-Tax-Enforcement-v3-Read-Only.pdf Continue reading (English) The Rise of International Tax Enforcement. Bloomberg April, 2012