NCPA - National Center for Policy Analysis

BOWING TO THE GLOBAL TAX BULLIES

September 14, 2009

A meeting was held in Mexico City last week under the auspices of the Paris-based Organization for Economic Co-operation and Development (OECD), whose implicit goal is to create a global high-tax cartel.  It claims to be in favor of transparency and global economic growth.  However, as with many domestic and international government organizations, the OECD's actions are often contrary to its words.  In order to create a global tax cartel, the OECD needs to have tax information shared among nations -- which means that the citizen of any country that signs on to this scheme may have his or her tax information shared with other member jurisdictions, says Richard W. Rahn, a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

  • The OECD has managed to get 87 jurisdictions to sign on to its global "tax standard."
  • The high-tax countries are using the OECD to threaten low-tax jurisdictions to sign this agreement.
  • It is worth noting that the tax bullies at the OECD and at other international organizations, such as the United Nations, International Monetary Fund and World Bank, who demand that others pay higher taxes, enjoy tax-free personal income courtesy of the world's taxpayers.

Freedom House, an organization that keeps its eye on human rights abuses and anti-democratic activities by countries, lists a number of the countries on the OECD list of cooperating jurisdictions as "not free" or only "partly free" -- including Russia, China and the United Arab Emirates.  Yet some democratic and free jurisdictions have been listed as noncooperating by the OECD.

  • According to the OECD, the United States should be sharing tax information with nondemocratic and/or corrupt countries on its list.
  • Worse yet, the Obama administration is supporting the OECD in this wholesale violation of basic rights.

The OECD is supporting the double taxation of capital and trying to quash those jurisdictions that do not levy multiple taxes on savings and investment, i.e., productive capital.  Without high levels of productive capital, countries will not grow and new and well-paying jobs will be created only rarely.  Taxing capital is not only economically destructive but morally suspect, says Rahn.

If the OECD ultimately gets its way, individuals and businesses trying to protect themselves from multiple taxation of their savings and investments — from thuggish and rapacious governments and from criminal gangs — will have nowhere to go, and that will be the end of civil society, explains Rahn.

Source: Richard W. Rahn, "Bowing to the Global Tax Bullies," Cato Institute, September 10, 2009.

For text:

http://www.cato.org/pub_display.php?pub_id=10524

 

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