- The Washington Times - Sunday, December 21, 2003

Many politicians seem to think the answer to every alleged problem is higher taxes. Howard Dean, for instance, has said he would repeal the Bush tax cuts — even though this would boost the average family’s tax burden by nearly $2,000.

This initiative sounds radical, and it is. But some proposals out there are even worse.

The United Nations, for instance, wants to create an International Tax Organization (ITO) empowered to interfere with national tax policies.

This crazy idea first surfaced two years ago in a report from the world body’s “High-Level Panel on Financing for Development.” Since then, the U.N. has been working to turn it into reality. For instance, U.N. General Secretary Kofi Annan recently called for creating a global tax commission. But no matter what it’s called, an international bureaucracy with power over tax policy would be an assault on American sovereignty.

An international tax organization, of course, would mean higher taxes and bigger government. Indeed, U.N. officials have been quite open about their intentions. The chairman of the U.N. panel that first endorsed creation of an ITO said it would “take a lead role in restraining tax competition.”

According to this mentality, it’s unfair for America to have lower taxes than places such as France and Germany, especially if it means jobs and investment flee Europe’s welfare states and come to America.

For all intents and purposes, the U.N. wants to create an “OPEC for politicians.” Governments would conspire to keep taxes high, and countries with free-market tax systems — such as the United States, Switzerland, Ireland and Hong Kong — would be targeted for persecution.

The U.N. also wants the power to levy its own taxes. The original report looked at two options — a tax on currency transactions and a tax on energy consumption. Both proposals would hit America hardest. But this is just the tip of the iceberg. In the past, the U.N. has endorsed new taxes on the Internet, including a tax on e-mail. Again, the U.S. economy would pay the lion’s share if this reckless idea took effect.

But the prize for the worst U.N. idea probably belongs to the proposal to give governments permanent taxing rights over emigrants. You see, the U.N. thinks it’s unfair when talented people leave high-tax socialist nations and move to places such as America. But since even the U.N. realizes it would be unacceptable to prohibit emigration, the bureaucrats are instead proposing to let governments tax income earned in other nations.

This scheme is a direct attack on American interests because of our high immigration — particularly the well-educated portion of the immigrant population. For instance, if a doctor from the Caribbean moves to America, his home government would get to tax income he earns here. If a Chinese entrepreneur moves to Silicon Valley, the Chinese government would get to tax his U.S. income.

Foreign-born workers in the United States, including both citizens and resident aliens, earn nearly $600 billion each year. Imagine the damage if foreign governments could tax that income. Even if they imposed only a 15 percent tax, foreign governments could drain nearly $100 billion from our economy.

There is an understandable temptation to dismiss these U.N. proposals as silly. After all, the United States can veto any bad initiatives. But this passive approach is a mistake. What would happen, say, if Howard Dean were president when the U.N. was voting whether to create an International Tax Organization? Could we trust him to veto this nutty scheme?

Another reason we should worry: The U.N. is just one of several international bureaucracies working to undermine fiscal sovereignty. The Paris-based Organization for Economic Cooperation and Development (OECD) targets “harmful tax competition” and the Brussels-based European Union enthusiastically backs “tax harmonization.”

What’s particularly troubling is that U.S. taxpayers are footing the bill for much of this nonsense. We don’t belong to the European Union, but we pay 25 percent of the costs at the U.N. and the OECD.

Fortunately, some members of Congress are trying to address this. Rep. John Sweeney, New York Republican, has introduced legislation to end U.S. funding of these bureaucracies if they insist on pursuing policies that undermine America. Bureaucrats at the U.N. and OECD don’t want to risk their bloated budgets and tax-free salaries, so this is a good approach.

Clearly we have to do something — unless we want to see our tax bills soar.

Daniel J. Mitchell is McKenna senior fellow in political economy at the Heritage Foundation.

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