Tuesday, March 26, 2013

How to Make America a Global Tax Haven

Isn't it astonishing that at the very moment the USA is twisting arms the world over ostensibly to crack down on tax havens and the erosion of the tax base they help perpetuate, Bloomberg could run this headline without irony or shame, and we can get a brand new quote from yet another American lawmaker about the virtues of making the US a tax haven. This time it's not Paul Ryan who wants to "make America a tax shelter" but his friend Devin Nunes, who says the US ought to abandon corporate income tax, and substitute for it a cash flow consumption tax, in order to "make the U.S. the largest tax haven in human history."

You just cannot make these things up. You remember Nunes, I hope--yes, that's him, the co-chair of the international working group on tax reform convened by Camp & Levin. Yes, that Levin, the one that wrote FATCA, the legislation that is supposed to stop Americans from cheating on their taxes by using other countries as tax havens.

Of course you can say that in substance the two are very different--Levin's focus is to stop Americans hiding cash overseas in foreign bank accounts, while Nunes just wants to let corporations pay less tax on the income they earn in the US. And a cash flow consumption tax might not be evil. But using the tax haven and tax shelter rhetoric as a marketing strategy is objectionable. Either you think tax havens and tax shelters are an abuse of the rule of law, in which case you shouldn't try to turn your country into one, or you think they're just dandy in which case you shouldn't try to shut everyone other country down  to capture the market for yourself.



3 comments:

  1. Things are going to get very interesting on this front. Right now if you look at W&M website they are getting "swamped" with anti FATCA/FBAR comment letters addressed to the International Working Group. The other problem is there is a rumor out there that the IGA countries(Canada included) won't sign until Camp makes some type of commitment to FATCA reciprocity. No commitment from Camp no IGA. Supposedly Treasury is going to ask Camp and Ways and Means the week of April 8th to give the IRS authority to impose the same FATCA requirements on US banks as per the IGAs.

    The real astonishing thing is the lack of involvement from Treasury/IRS and the pro FATCA tax profs. The anti FATCA comments are starting to get rather out of hand in numbers. Can the IRS put the anti FATCA genie back in the bottle.

    http://waysandmeans.house.gov/taxreform/workinggroups.htm

    Some of the big guns like the American Petroleum Industry are starting to put in their comments.

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  2. According to the financial secrecy index of 2011, America ranked #5:

    http://www.financialsecrecyindex.com/2011results.html

    At the going rate of FATCA, America should become the most secret, largest and most hypocritical tax haven in the world by 2014.

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  3. "You can not make these things up." (Allison Christians)

    "I don't make jokes. I just watch the government and report the facts." (Will Rogers)

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