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To: Keith Monahan who wrote (66220)	3/20/2001 7:14:42 AM
From: long-gone	Respond to of 116756

<<If you are worried about the U.S. economy, at least you can take comfort in the fact that you are not trying to run a business in Europe:>> OT(?) Far more than demographics & labor policy facing Europe: An International Tax Conspiracy 'Global Tax Police' Under Scrutiny CNSNews.com Tuesday, March 20, 2001 House Majority Leader Dick Armey, R-Texas, says Organization for Economic Cooperation and Development is trying to initiate a "global network of tax police" with an initiative that the organization believes will stop "harmful tax competition." Armey wrote to Treasury Secretary Paul O'Neill requesting that he "re-evaluate" America's involvement in the initiative – which was supported by the Clinton administration. "It is my understanding that career personnel are urging you to support the Clinton administration viewpoint on the grounds that the OECD initiative is needed to reduce tax evasion. This is a red herring. A global network of tax police is the wrong approach. Instead, the U.S. should shift entirely to a territorial system, the common sense notion that countries only tax income that is earned within their borders and also eliminate the double taxation of income that is saved and invested." Armey said in his letter to O'Neill. "Bad economic policy is not the only reason to reject the OECD's initiative. Countries that are being persecuted for having attractive tax police will have little incentive to cooperate in the prosecution of drug dealers, terrorists and other international criminals. Indeed, the OECD proposal likely will cause an increase in crime since some people may seek illegal income from things like money laundering," Armey said. OECD contends it is trying to crack down on tax evasion. "The OECD project has been mischaracterized as seeking to harmonize taxes at a high rate, as forcing countries to alter their tax structures, and as attacking legitimate tax planning undertaken through legal means. These characterizations of the project are not correct. The project does not challenge legal tax planning," according to an OECD statement. Armey also believes the Paris organization's effort is "misguided." "It is designed in effect to create a tax cartel for the benefit of a small handful of high tax nations. These countries are seeking to impede the flow of global capital, and the U.S. economy with its comparatively attractive tax system will suffer if they succeed," Armey said. But OECD contends that "the project seeks to impede tax cheating, to prevent wealthy taxpayers from illegally avoiding their share of the cost of infrastructure and public services in their country residence imposed by the tax law. The project is concerned primarily with the illegal tax practice [from a civil or criminal perspective] of failing to report income, and accordingly with regimes that facilitate this practice." A Treasury Department spokesman said Monday that O'Neill had no comment on Armey's letter. Daniel Mitchell, an economist with the Heritage Foundation, thinks OECD's initiative is "a direct threat to America's economic interests" and believes "international bureaucrats are seeking control of U.S. tax law." "The United States is a low-tax country by industrial-world standards and our favorable tax treatment of foreign investment has made America a magnet for world capital. Needless to say, any effort to hinder or restrict tax competition between nations would undermine our competitive advantage," Mitchell said. OECD, according to spokesman Nick Bray, does not want to dictate the tax policy of the United States. "The claim that the OECD wants to dictate the United States tax policy is preposterous, ridiculous and absolute rubbish," Bray told CNSNews.com in a statement from Paris. The United States is the largest member of OECD. newsmax.com