The main targets of the economic oppression are Switzerland (No. 4), Liechtenstein and the British overseas territories of the Cayman Islands, Bermuda, British Virgin Islands, Jersey, Guernsey, Isle of Man, and Turks and Caicos. The Western powers have used the Organization for Economic Cooperation and Development (OECD) as their main instrument for attacking the freer jurisdictions. The OECD, primarily with the prodding of the French, started by trashing “tax competition,” as if tax competition was not a legitimate form of competition among sovereign states. (In the United States, high-tax states such as California, Illinois and New York don’t like the competition from low-tax states, such as Texas, Florida and Nevada. However, that does not give the high-tax states the moral right to shut down the low-tax states.) The OECD then went on to create a blacklist for so-called tax havens that were not in “compliance” with an “internationally agreed tax standard.” The financially free, low-tax countries were not in agreement, but their rights were run over by the bigger powers. Here in the Bahamas at the Global Financial Summit last week, Ryan Pinder, minister of financial services, rightly complained about the cost of the unjustified financial assault by the United States and others on his sovereign country.
Under the Obama administration, the United States has become the biggest single financial imperialist and oppressor of global economic freedom. Its biggest “gun” has been the new Foreign Account Tax Compliance Act (FATCA), which requires foreign financial institutions, including banks, stockbrokers, hedge funds, pension funds, insurance companies, trusts, etc., to report directly to the Internal Revenue Service all clients who are U.S. “tax persons.” This makes it almost impossible for U.S. citizens and green card holders living abroad to obtain local bank accounts, and is driving massive amounts of foreign investment and jobs out of the country. It is also causing great resentment toward the United States by those affected directly or indirectly. Some jurisdictions, such as Hong Kong (No. 1 in economic freedom) are beginning to push back, as are many domestic and foreign financial institutions. More responsible members of Congress are also raising questions and calling for repeal of this highly destructive regulation by the Obama Treasury.
How would most Americans react if the Swiss government told all American financial institutions they had to report their customers to the Swiss tax authorities so the Swiss could determine if any Swiss citizens or residents had U.S. accounts? The outrage and resentment would be justifiable. What a repressive world it would become if foreign nations could extend their laws into the sovereign borders of other nations whenever they wished. What Americans should be asking is how the Swiss, in a landlocked country with few natural resources, have managed to create a level of prosperity as high as that in the United States with a much smaller government (33 percent of gross domestic product) as contrasted with the United States (41 percent of GDP) and, in general, provide higher levels of government services with lower taxes, more economic freedom and as much personal freedom (including gun ownership).
Now, President Obama has again called for even higher taxes. His ideal seems to be the French, big-government model. If the Republicans are smart, they should support and advocate for the smaller-government, Swiss model — France’s freer and more prosperous nextdoor neighbor.