Treasure Islands - Nicholas Shaxson [93]
Mitchell’s specialty is a tone of calculated, arched-eyebrows incredulity when discussing people or ideas that he disdains, and his sound bites are carefully crafted to appear utterly reasonable. His short, peppy little Internet videos are clear, simple, and striking in their directness, and he sprinkles them with homespun wisdom, along with repeated references to freedom and liberty and digs at his adversaries—“international bureaucrats,” “intrusive governments,” and “Europeans” (especially the French, his particular bogeys)—uttered in tones of theatrical horror.
“Let me give you some frightening numbers,” Mitchell said in a bouncy presentation to a “Freedom Conference” at the antitax Steamboat Institute in Colorado in August 2009. Citing a seventy-five-year projection that raised the specter of whopping tax increases, and reeling off statistics about the free-spending habits of George W. Bush (whom he dislikes), he predicted that “we will have a bigger government than any European welfare state—even France and Sweden…. I don’t know if that means we have to stop using deodorant and train our army to surrender if there’s a war, but we are going to be a European welfare state.”
Before the OECD report emerged, Mitchell said he did his best to avoid international tax. “My bread and butter was fiscal policy issues: tax cuts versus tax increases; that kind of thing,” he said. “For me, international tax—transfer pricing, interest allocations, and so on—was almost as bad as excise taxes on milk in Mongolia.”
In those days there was no real ideology for tax havenry: Few people understood how important the offshore system was becoming, and in the age of rapid globalization, almost nobody questioned it. Fortunately for Mitchell, the OECD had tried to avoid looking like it was victimizing smaller jurisdictions by couching its initiative not so much as an attack on tax havens but as an attack on harmful tax competition—the race to the bottom between states to attract footloose capital by offering zero taxes and other lures. This focus gave Mitchell an immediate advantage in Washington, letting him complain that the OECD was a big bureaucracy that opposed competition.
This question of “competition” is one of the main arguments that tax havens deploy to justify their existence, and it is well worth exploring. Mitchell articulates these arguments as well as anybody.
“International bureaucracies and politicians from high-tax nations are launching a co-ordinated attack against these jurisdictions. The high-tax nations of the world want to set up something equivalent to OPEC,” he thundered, flashing up pictures of sinister-looking men in Arab headdresses. “It is an effort by high-tax nations to form a cartel that will enable the politicians to put in place worse tax policies.”7
“Say you only had one gas station in a town,” he continued in a recent presentation.8 “That one gas station could charge high prices, it could maintain inconvenient hours; it could offer shoddy service. But if you have five gas stations in a town, all of a sudden those gas stations need to compete with each other: They have to lower prices, they have to be attentive to the needs of consumers. We see the same thing internationally, with governments.”
He went further. “Imagine you are a governor of Massachusetts. You’d love to shut down New Hampshire—because it’s competition. Obama and the rest of the collectivists on the left hate tax havens because they are outposts of freedom. Because of globalization, labor and capital are a lot more mobile than they used to be. If governments are trying to impose high tax rates, [people] actually have options to move either themselves, or their