Joel Mowbray

Not helping matters for the OECD was the pesky presence of Dan Mitchell of the Heritage Foundation and Andy Quinlan of the Center for Freedom and Prosperity, who camped out at the same hotel where most of the conference participants were staying. 

Along with the Friedrich Naumann Foundation, the groups sponsored a forum on Wednesday, June 2, on the eve of the OECD conference, where two different panels spelled out precisely why the OECD?s claims that a ?level playing field? exists were, at best, intellectually dishonest.  To the extent any attendees needed a reminder that lower taxes are fundamentally sound economic policy, there was even a Swiss professor on hand to give a powerpoint-based lecture.

Representatives from several low-tax countries on the OECD?s hit list attended the free market event and told this journalist afterward that they had heard more than enough to convince them that the OECD was not playing fair.  And over the next two days, they stood their ground.

It appears that the OECD conference was doomed from the start.  Small countries not privileged enough to be included in the OECD were determined not to cave, particularly since OECD members like Switzerland probably never will.  The affair, ironically, was not terribly contentious, as low-tax nations politely smiled and nodded, but in the end, brushed off the tax cartel?s entreaties.

The OECD essentially admitted defeat, pushing back the date of the next meeting until sometime in autumn 2005.

Failing to twist the arms of tiny jurisdictions like the Cayman Islands and Anguilla, the OECD?s next mission is an odd mix of quixotic and absurd.  The tax cartel?s black list is now being expanded to include various Asian nations, particularly Singapore and two jurisdictions that are part of communist China, Hong Kong and Macao.

Which raises an important question: why is the U.S. supplying one-fourth of the $200 million annual budget of a group that thinks jurisdictions within a communist country have dangerously low tax rates?  And on a practical level, does anyone at the OECD really think that China cares what a bunch of bureaucrats in Paris think they should do with their tax policy?

OECD officials must be drinking a little too much of the free vintage wine that they keep in the cellar of their Paris office.  (Seriously, free wine?or at least, free to them.)

Although U.S. representatives at the OECD conference were relatively quiet over the two days, there is little indication that the U.S. will pull the plug on the increasingly large appetite of the OECD for higher global taxes. 

Plunking down $50 million a year should buy a lot of influence, yet for some reason, the White House has stayed largely passive, allowing Treasury Department officials to give the OECD more or less free rein to push tax policy that is clearly antithetical to President Bush?s well-stated beliefs.

And if a fierce tax cutting Bush administration can?t thwart the OECD?s expanding mission, then what might happen under a President Kerry or (heaven forbid) a President Clinton? 

The OECD would like nothing more than for the U.S. to end its status as the world?s largest ?tax haven??there is roughly $5 trillion in passive foreign investment sitting inside the United States, capital that generally can avoid being taxed by any government.

If the U.S. acceded to OECD wishes and began taxing the $5 trillion or reporting the income from those investments to foreign governments?meaning their tax collectors could get their hands on that money?then the loss to the U.S. economy in lost investments could be much greater than the $50 million taxpayers are now forced to shell out each year to support the OECD?s push for higher global taxes.


Joel Mowbray

Joel Mowbray, who got his start with Townhall.com, is an award-winning investigative journalist, nationally-syndicated columnist and author of Dangerous Diplomacy: How the State Department Threatens America's Security.

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