U.S. Announcement of Partial Withdrawal from Harmful Tax Initiative Creates Uncertainties

On May 10, 2001, U.S. Treasury Secretary clarified the U.S. reservations on the Organization of Economic Cooperation and Development’s harmful tax practices initiative, creating further uncertainty as to the outcome of the initiative. O’Neill announced he was “troubled by the underlying premise that low tax rates are somehow suspect and by the notion that any country, or group of countries, should interfere in any other country’s decision about how to structure its own tax system. I also am concerned about the potentially unfair treatment of some non-OECD countries. The United States does not support efforts to dictate to any country what its own tax rates or tax system should be, and will not participate in any initiative to harmonize world tax systems. The United States simply has no interest in stifling the competition that forces governments like businesses to create efficiencies”…[more]