abolished it is anticipated that the industrialized countries will substantially increase the
amount of capital that remains within their borders, as they would have eliminated a key
element of obstruction to finding financial records of its citizens.
The critics of this such as Rep. Dick Armey and the Heritage Foundation’s Dr. Daniel
Mitchell have rightly stated that this will seriously impugn the ability of some countries
in the developing world ability to attract capital investment on a global basis. Indeed,
Rep. Armey suggests that the entire situation may backfire on the United States and other
OECD members as countries that have been traditional allies will now view this new
initiative as an all out threat on their territorial sovereignty.
Moreover, the increase of taxable income may, it is suggested, have adverse effects on
the very same governments that were supporters of the OECD’s proposal. There is a
cogent argument that the increase of taxable income may lead to radical and unnecessary
wastage of public expenditure by governments. In addition, a tighter and more fiscally
well-planned budget is widely known to be much more responsive to good governance as
governments have to be prudent in their expenditure of funds available.