Paul has been blocking tax treaties on the Senate floor over privacy concerns, throwing a wrench into an Obama administration initiative aimed at bringing in tax revenue without actually raising taxes.
“Don’t tell us the treaty is going to get us what we want. It won’t,” he told Justice Department officials.
“It’s also got some holes in it. It doesn’t get us to the names before 2009. Those are the major names that Credit Suisse has. The major number of names, or at least half of the names, are the before-2009 names. They’re not covered by this new protocol,” Levin said.
After a settlement with Swiss bank UBS in 2009, U.S. officials sought some 20,000 names of U.S. account holders through the treaty process but only emerged with 4,700.
But tax treaties may have little meaning in the global information age, according to Michael Keen, deputy director of the International Monetary Fund’s fiscal affairs department.
“The empirical evidence that it does anything for investment is pretty weak,” Keen said this month at the Organisation for Economic Co-operation and Development’s international tax conference.
But Will Morris, the director of global tax policy at General Electric International and a business adviser to the OECD, wasn’t so sure.
“The anecdotal evidence is that they are critical [to decisions about] making investments,” Morris said.
The OECD is working to create new cross-border tax rules as corporations find ways to limit their taxes by exploiting gaps between different countries’ tax systems. Anti-abuse rules for treaties are a part of that effort.