Tag: havens

Obama Taking on ‘Tax Havens’

Jeff Zeleny at the New York Times Caucus Blog reports, “President Obama will present a set of proposals on Monday aimed at changing international tax policy, calling for the elimination of benefits for companies and wealthy individuals that harbor their cash in offshore accounts.”

Cato scholars have long made arguments in defense of tax havens. In The Wall Street Journal, Senior Fellow Richard Rahn outlined the policy the federal government should be taking instead:

The correct policy for the United States to follow is to reduce its corporate tax rate to make it internationally competitive, and to move toward a tax system that does not punish savings and productive investment so severely. We know from the experiences of many countries that reducing tax rates and simplifying the tax code improve both tax compliance and economic growth. Tax protectionism should be rejected because it is at least as destructive to economic growth and job creation as are tariffs on goods and services.

Cato scholar Daniel J. Mitchell narrated a three part video series on the subject, presenting the economic and moral cases for tax havens, and a final video that punctured myths associated with the practice.  

Mitchell spoke on Capitol Hill last month about the role of tax havens and in Foreign Policy magazine, Mitchell explained why tax havens are a blessing.

Withdrawing from Afghanistan

Oh, the war in Afghanistan. The more I learn, the more I’m convinced that we need to get out.

As I described the situation to my Cato colleague Chris Preble, for lack of a better analogy, the Afghanistan–Pakistan border is like a balloon: pushing down on one side forces elements to move to another — it doesn’t eliminate the threat.

The fate of Pakistan — a nuclear-armed Muslim-majority country plagued by a powerful jihadist insurgency — will matter more to regional and global stability than economic and political developments in Afghanistan. But if our attempts to stabilize Afghanistan destabilize Pakistan, where does that leave us? Like A.I.G., is Afghanistan too big to fail? No.

President Obama earlier this month issued a wide-ranging strategic review of the war and the region, and declared “the core goal of the U.S. must be to disrupt, dismantle, and defeat al Qaeda and its safe havens in Pakistan, and to prevent their return to Pakistan or Afghanistan.” But al Qaeda, as we very well know, is a loosely connected and decentralized network with cells in over 60 countries. Amassing tens of thousands of U.S. and NATO troops in one country — or any country — is unnecessary.

Until Pakistan’s intelligence agency, the ISI, changes priorities, this is a stalemate and we are throwing soldiers into a conflict because policymakers fear that, if we leave, it will get worse. Sound familiar?

The only military role necessary in Afghanistan is trainers and assistance for the Afghan military, police, and special forces tasked with discrete operations against specific targets. The bulk of the combat forces can and should be withdrawn.

As for Pakistan’s impulsive act of gallantry in Buner this week, that’s certainly welcome news. But Mukhtar Khan, a Pakistani freelance journalist whom I’ve talked to on numerous occasions, records here that last year in Buner, a lashkar (tribal militia) successfully beat back the Taliban’s incursions.

Thanks to the Swat Valley peace deal between pro-Taliban TNSM founder Sufi Mohammad and the Pakistani government, militants have spilled back into Buner, killing policemen and terrorizing locals. What’s especially troubling this time around is that the spread from Swat into Buner brings militants closer to Mardan and Swabi, which leads directly to the four-lane motorway running from Peshawar to Islamabad. (I took the picture above when I was on the motorway to Peshawar last August.)

Overall, I’m not optimistic that the Pakistani government’s effort in Buner changes the grand scheme of things. Unless the intervention is coupled with a comprehensive shift in Pakistan’s strategic priorities, which means a move away from allowing its territory to act as a de facto sanctuary for militants undermining U.S. and NATO efforts in Afghanistan, then these sporadic raids tell us nothing about their leaders’ overall commitment to tackling terrorism.

For instance, Pakistan’s Supreme Court recently ordered the release of hard-line cleric Maulana Abdul Aziz on bail. Aziz was a leading figure from the Lal Masjid (Red Mosque) massacre of July 2007 and faces several charges, including aiding militants. For an idea of how pervasive militant sympathies go, when the Islamist political party Jamiat-Ulema-e-Islami was in power in North-West Frontier Province, a Pakistani territory adjacent to the ungoverned tribal areas, its leaders proselytized in mosques about the need for jihad in Afghanistan. In addition, when Abu Musab al-Zarqawi, the head of al Qaeda in Mesopotamia, was killed in Iraq, their parliament observed a two-minute moment of silence.

If leaders within Pakistan’s military and intelligence establishments are serious about combating extremism, it will take more than periodic military moves into restive areas. We will not know for the next several months whether they have abandoned their lackadaisical attitude toward extremism.

Mueller on Afghanistan

John Mueller, who has been helping out with Cato’s counterterrorism project, has a short essay in Foreign Affairs questioning the premise behind continuing the war in Afghanistan. That is: Al Qaeda would gain haven in Afghanistan absent a U.S. ground presence and use it to attack us here.

Mueller says that the Taliban would not be dumb enough to again offer aid and comfort to the wackos whose attacks brought the U.S. intervention that swept them from power before. I think this overstates the extent to which our enemy in Afghanistan is a singular entity with one way of thinking about its interests, rather than an amalgam of militias that view the utility of cooperation with foreign jihadists in varying ways. But the general point is mostly right.  Advances in UAV technology alone make a replay of the 1990’s impossible.

Mueller’s argument is badly needed in official places like Foreign Affairs where the “failed states are always terrorist havens” thesis is gospel. One can usefully export it to Somalia. The al-Shabab group’s loose ties to Al Qaeda are producing calls for U.S. intervention, despite the lack of evidence that international terrorists are using Somalia as a training ground or could.