Wednesday, April 25, 2012

Letter to the Ed on India's Tax Sovereignty

I wrote a letter to the editor of the FT this week in response to their coverage of US lobbyists working through Tim Geithner to pressure India to change their plans; I didn't realize at first that the FT published the thing in the Tuesday edition, here.  I'm quite surprised to see just how much they revised it, but the basic message is there.  Here is the text of my original letter:

I read with interest your story on the U.S. business lobby's efforts to push India into a tax policy war with the U.S. in the April 19 edition.  You report that a coalition of lobbyists "sent a letter to Mr Geithner asking him to 'raise concerns' about the tax bill in talks with Indian officials during the spring meetings of the World Bank and International Monetary Fund this week."  These folks do not want to "raise concerns."  They want to stop India's democratically elected government from enacting legislation in accordance with its sovereign status as an independent nation, and it is amazing and preposterous that they fully expect the U.S. government to help them do that.   
This is because of course if U.S. businesses really don't like what India is doing, they have a perfectly viable option, which is to do what they say they are going to do, namely, take their assets and go home.  But they do not want to do that.  They want to be able to continue doing business in India at the lowest possible cost to them, and if the Indian government won't play along and give them the tax system they want, these business leaders would like to turn this into a government-to-government conflict so that it is India against the U.S. instead of India minding its own business, writing its own laws, and opening itself to businesses willing to work within its sovereign territory according to its own rules. 
Anyone is free to disagree with India's tax policy direction, and anyone is free to express "concerns" about it.  But India's tax policy decisions belong to India's people, and it is shameful to see the U.S. business lobby so brazenly insisting on their right to intervene.  
I see that it's prompted a response; this is an important topic so I am happy to see it getting some attention even if I disagree with the writer.

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