RHETORIC vs. REALITY: For Ending Corporate Tax Havens, While Pushing Pact to Preserve Them
By David Sirota
May 4, 2009 - 4:32pm ET
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Today, I read this:
NEW YORK (CNNMoney.com) -- President Obama on Monday spelled out his proposals to close corporate tax loopholes on U.S. multinational corporations and crack down on overseas tax havens.
But last week, I read this:
The White House's newly confirmed trade representative, Ron Kirk, indicated that was under consideration in a speech last week, saying "we believe there is strong bipartisan support for the pending free-trade agreement with Panama."
How are these two issues related? What's the contradiction between purporting to crack down on offshore tax havens while pushing the Panama Free Trade Agreement? Here's Dow Jones newswires to explain:
The Organization for Economic Cooperation and Development on April 2 listed Panama as one of 30 tax haven jurisdictions that have committed to international standards on bank secrecy, but have "not yet substantially implemented" those standards. Panama is also mentioned in legislation introduced by Sen. Carl Levin, D-Mich., with sanctions for tax haven jurisdictions.
I also read this from Public Citizen:
President Obama's ability to deliver on his campaign commitments to close tax loopholes that promote offshoring and re-regulate the financial sector would be dealt a sharp blow if the U.S.-Panama Free Trade Agreement (FTA) is passed, according to a Public Citizen report released today.
The new report details how Panama explicitly created an industrial policy designed to create a "comparative advantage" in tax-evasion and money-laundering services for entities such as the bailed-out American International Group (AIG) and Mexican and Colombian narcotraffickers. The report also examines how specific FTA rules would remove key policy tools – such as limitations on transfers from tax-haven countries that are used to combat financial crimes – and would also conflict with U.S. government efforts to combat the global economic crisis by re-regulating finance.
Sorry, but pretending to be for cracking down on tax havens while pushing a trade deal that rewards one of the biggest tax havens - and codifies that tax haven's laws into our international trade system - insults the public's intelligence.
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