Senator Carl Levin is revitalizing his crusade against so-called tax havens. In a press release yesterday, he announced the reintroduction of his Stop Tax Haven Abuse Act, while touting the support of labor lobby groups and advocates of big government. As the Center for Freedom and Prosperity noted in a press release yesterday, the legislation contains a variety of anti-tax competition and anti-growth measures which will harm businesses, investors, workers and the economy. But the heart of the issue is Senator Levin’s continued use of myths and misinformation regarding these so-called tax havens.
According to Senator Levin, there are great gabs of revenue to be had if only we had more enforcement and stiffer penalties on tax cheaters. There’s $100 billion available in “lost revenue” each year, he claims. But we’ve seen these numbers before, and know from past experience that they’re based on nothing more than wishful thinking. From the CF&P release:
Senator Levin claims his proposals will collect $100 billion in elusive “tax haven” revenue, but the former Democratic staffer, Jack Blum, who first claimed such a figure 10 years ago was forced to admit when pressed by the Congressional Research Service that he fabricated the number. There is no evidence that the alleged revenues would materialize under this bill.
Contrary to what the Senator would have us believe, the primary problem with our tax code is not cheaters, it’s how awful it is. The tax code is impossible to understand, and noncompliance is a consequence of that fact. Estimates have the compliance costs for the current tax code upwards of $400 billion. Rather than creating another reason for foreign investment to flee the country, we should simplify the tax code, which would spur economic growth and thus increase revenues.
Here are three Center for Freedom and Prosperity videos that clear up some of his other tax haven myths:
