Wednesday, September 22, 2010

A Chinese Feast of Red Herrings and Libertarian Scaremongering

The lead feature article in Hong Kong's China Economic Review covers tax evasion and tax information exchange processes. It includes a balance of opinion, TJN's David Spencer, Oxfam, and Richard Murphy of Tax Research LLP are cited, as are Dan Mitchell of the right-wing libertarian Cato Institute and Geoffrey Hodgson of the Society of Trust and Estate Practitioners (a pro-tax haven lobby), but raises many Aunt Sally arguments about why automatic information exchange is impracticable (gossip about cardboard boxes of information lying around unopened stretches credulity in an era of digital data exchange) and peddles OECD estimates of the volume of funds held offshore - USD7 trillion - that are at least a decade out of date. The piece is not entirely accurate about TJN - one sentence describes us as saying that tax harmonisation is "inevitable" when we say no such thing.

What is of interest, however, is to read the latest line of scaremongering from our old friend Dan "Hyperbole" Mitchell. Mitchell loves to cast the OECD as a totalitarian organisation - the article's title, Bigger Brother, underlines this point - and he doesn't hold back from raising the spectre of the OECD's plans for world domination:

Mitchell believes that the OECD and G20 push will follow roughly four stages: the break-down of existing privacy laws, followed by automatic exchange of tax information, then a drive for worldwide “tax harmonization,” and finally a push to raise corporate taxes.

He argues that many of these stages could be accomplished within the next two to five years, depending on the circumstances.

Its never clear to us whether Dan actually believes a word of what he spouts, but the fact that neither the G20 nor the OECD have been pushing for automatic information exchange as the global standard (we wish they would), and no-one has mentioned the prospect of worldwide tax harmonisation now or at any time, doesn't inhibit Dan from talking complete and utter crap.

You can read the article here.


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