by Richard W. Rahn
November 09, 2015
from WashingtonTimes Website
Rahn is a senior fellow at the Cato Institute and
chairman of the Institute for Global Economic Growth.
Tax avoidance schemes
costs hundreds of
billions each year.
Taxers are after You
What happened to 'no taxation without
Are you aware that the American government has been slowly giving
away its power to international bureaucrats to determine how its
businesses and citizens are taxed?
Most wars do not turn out the way the people who started them
Setting aside the hot military wars,
look at the consequences of the "war on drugs" and the "war on money
laundering and tax evasion."
The global war on money laundering and
tax evasion has failed in the three decades since it began in
earnest, and it is now on its way to undermining the rule of law
around the world, the legitimate role of financial institutions, and
the right of sovereign governments to determine their own tax
The new anti-money-laundering laws and regulations have resulted in
millions of Americans who live abroad and others living outside
their home countries being unable to get bank accounts and other
financial services in the countries where they live.
Rather than protecting people who need financial services,
government regulations are increasing their misery. Banks avoid
potential government fines by dumping customers, whose source or use
of their money is too difficult to figure out.
International money-laundering expert,
Burke Files, reported to me
from Mombasa last week that in central Africa,
"more and more money is leaving the
banking system to seek alternative remittances.
The money is now out of the system and being shipped in bulk
currency, and the remitters are being forced to pay about 9
percent - from what was 3 percent to 4 percent."
The Financial Stability Board (FSB)
based in Basel, Switzerland, released a damning report last week on
the decline in corresponding banking as a result of excess
The first federal laws on money laundering and international
prohibitions were passed three decades ago, with the excuses that
the law enforcement authorities needed them to fight the drug war
and other assorted criminality, even though money laundering is
almost impossible to tightly define - being a crime of intent rather
In 1998, the Organization for Economic Cooperation and
- which has been captured by the global big-government, high-tax
lobby - published a report titled "Harmful
Tax Competition," which was widely and rightly ridiculed
because it ignored the fact that competition is good, including tax
Imagine how much higher tax rates would be in New York, Illinois and
California if their rates and inefficiencies were not at all
disciplined by better-managed states that do well without state
income taxes, such as Texas and Florida. Other things being equal,
both individuals and businesses tend to move from high-tax places to
lower-tax places around the globe as a rational response to bloated
and oppressive government.
The statist bureaucrats at the OECD and their big-government masters
were undeterred in their fight for higher taxes on others (despite
their own tax-free salaries).
They claimed that they were only trying
to make sure that money from Americans and others was not being
hidden in foreign banks to evade taxes. The non-American banks then
agreed to implement withholding on payments to Americans and others
so that the governments would get their tax money.
The OECD first agreed to it, but then reneged, demanding to know the
names of the banks' clients. This showed it was not just about
money, but control over others by
the 'political' class.
Having no choice, the banks agreed...
So then the OECD started going after
corporations, claiming it was "unfair" that they had some of their
activities in low-tax jurisdictions.
Now the international political class is
demanding that they determine where and how much a company should be
taxed. But this is still not enough for these greedy politicians and
bureaucrats, who are now demanding a "global minimum corporate tax,"
as Democratic Sen. Sherrod Brown of Ohio
advocated in the Nov. 6 Wall Street Journal.
Most businesses are taxed at individual - not corporate - rates,
because they are set up as sole proprietorships, partnerships and
You can be sure that the next effort
will be to establish a minimum tax for all businesses everywhere on
the globe, which will be quickly extended to all individuals.
What right does the United States or
France have to tell other countries what their tax rates must be?
As global taxes are increasingly
implemented, Americans and citizens of other countries will lose
their democratic right to determine their own taxes - and Americans
will be right back where they were under King George III.
What happened to "no taxation without