Concern Over Obama's Election
It must be expected that the U.S. government will be back in force in international bureaucracies such as the OECD in order to intensify the pressure on lower-tax countries.
The Center for Tax Competition is concerned over the election of Barack Obama to the presidency of the United States. Obama is an overt proponent of “tax fairness” as a euphemism for implementing higher progressive taxes and opposing so-called tax havens. Barack Obama advocates redistributing wealth by means of taking away from “the rich” in order to give to “the poor”. During his campaign, he vowed to close the “tax gap between taxes owed and taxes paid”. Legislative bills supported by Obama also intend to thwart legitimate corporate tax optimization plans and to capture taxpayers inside the U.S. 35% corporate tax rate system. Obama in effect wishes to curb tax competition in the name of achieving a “level playing field”, a concept that contradicts the very idea of market competition.
Notably, in 2007, together with the senators Levin and Coleman, Barack Obama introduced the “Stop Tax Haven Abuse Act” which, along with countries such as the British Virgin Islands, the Cayman Islands, the Dutch Antilles or Liechtenstein, targeted Switzerland as an “offshore secrecy country” and as a “probable location for U.S. tax evasion” “unreasonably restricting U.S. tax authorities from obtaining needed information”. The U.S. may therefore well be joining the chorus of centralized welfare states such as France and Germany, whose governments have repeatedly expressed their hostility toward Swiss banking confidentiality. Obviously these high-tax countries recognize financial privacy as what it is and should be: an effective shield for the protection of legitimately earned wealth against predatory individuals and governments. After Barack Obama's election, it must be expected that the U.S. government will be back in force in international bureaucracies such as the OECD in order to intensify the pressure on lower-tax countries and get its hands on overtaxed productive citizens who chose the option of last resort and voted with their feet to another country. Unless these lower-tax jurisdictions stand firm, Obama's policy will inevitably have adverse consequences for worldwide capital accumulation and economic growth.
In the current economic crisis, which serves as a smokescreen for harmful interventionist and regulatory measures on economic activity, Barack Obama's tax plans would lead to a further erosion of private property and individual liberty. They should be resisted at all costs by Switzerland, which should instead reinforce its reputation as a reliable jurisdiction guided by the ethics of private property protection and financial privacy as fundamental human rights.