US Support of Global Tax Group Is ‘Ridiculous,’ Senator Says

US Support of Global Tax Group Is ‘Ridiculous,’ Senator Says
By Randy Hall Staff Writer/Editor
November 20, 2006

( – An international organization that proposes a global taxation system and is critical of the U.S. tax structure receives nearly one-fourth of its $400 million budget from the American taxpayer, a situation one Republican senator hopes to end.

“It’s ridiculous that we would support such a group,” Sen. Jim Inhofe said Friday of the Organization for Economic Cooperation and Development (OECD), a Paris-based grouping of 30 of the world’s most developed nations.

In a press release, the Oklahoma senator said the OECD “receives 25 percent of its budget from the U.S.” and has used that money “to encourage and support higher taxes on the American taxpayer.”

Inhofe is introducing the “Exit the OECD Act of 2006” (S. 4048), because, he said, “I refuse to allow American tax dollars to support organizations that aim to hurt the U.S. taxpayer, as is certainly the case with the OECD.”

Inhofe’s measure reads: “Notwithstanding any other provision of law, no federal funds may be expended to fund activities or projects undertaken by the Organization for Economic Cooperation and Development.”

“This bill is similar to my initiative to withhold U.S. funding from the United Nations and the OECD unless they abandon the promotion of global taxes,” he said. “Our government’s only leverage for oversight of the U.N. and the OECD is to control the flow of our financial support.”

Founded in the early 1960s to represent the interests of 20 developed nations ranging from Austria to the United States, the OECD has grown to 30 members while spending most of its history collecting statistics and publishing economic studies.

According to the organization’s website, the OECD “is moving beyond a focus on its own countries and is setting its analytical sights on those countries – today nearly the whole world – that embrace the market economy.”

In addition, the organization “helps governments to foster prosperity and fight poverty through economic growth, financial stability, trade and investment, technology, innovation, entrepreneurship and development cooperation,” the site says.

“Other aims include creating jobs for everyone, social equity and achieving clean and effective governance. But our underlying objective remains unchanged: to promote prosperity and well-being for people everywhere, with the support of cooperation between nations,” the site adds.

The group’s shift in focus has drawn sharp criticism from a number of conservative U.S. groups, including Americans for Tax Reform (ATR), the National Taxpayers Union (NTU) and the Small Business & Entrepreneurship Council (SBE Council). They made their views known in letters of support to the senator.

“The OECD has taken it upon itself to move from an international financial think tank to being the world investment police – and all at the expense of the U.S. taxpayer it denigrates,” said ATR president Grover Norquist.

“The Paris-based OECD has labeled the United States and other low-tax nations as rogue regimes,” Norquist said, even though investors “have sought to escape the high-tax regions of Western Europe to other, more reasonably taxing nations like the U.S.”

“If we are going to pay for one-quarter of the OECD, we should at least require that they not undermine American sovereignty on tax and financial issues,” Norquist added.

Kristina Rasmussen, senior government affairs manager for the NTU, agreed with Norquist’s criticisms.

“It is clear that the OECD has repeatedly overstepped its mission by advocating for higher taxes within OECD member countries and against worldwide tax competition,” Rasmussen said.

“Examples include suggesting the U.S. adopt a value-added tax in October 2006 and endorsing the creation of a global taxation system in May 2005,” Rasmussen added.

“As a grassroots organization dedicated to lowering taxpayer liabilities, we find it particularly galling that Americans are forced to subsidize the very international agencies that would add to citizens’ tax bills here at home and make our country a less attractive place to set up shop,” she said.

“The OECD, along with various countries that inflict weighty tax and social welfare burdens on their economies, do not like the idea that countries can and should compete in terms of taxation,” said Karen Kerrigan, president and CEO of the SBE Council.

“It appears they want all nations to impose onerous taxes and big government so high-tax countries do not lose out in terms of investment, jobs and economic growth,” Kerrigan asserted.

“Nations should be free to choose their own tax systems without interference, pushing and prodding from an international bureaucratic organization like the OECD,” she said.

“U.S. tax dollars certainly should not be used to undercut sound, pro-growth tax policies implemented at home or in other nations,” Kerrigan added.

Veronique de Rugy, a resident fellow at the American Enterprise Institute, noted that as employees of an international organization, OECD staff are exempt from paying any taxes to the U.S.

“It is rather ironic that OECD bureaucrats receive tax-free salaries, yet they consistently endorse higher taxes, both in America and around the world,” she wrote in a recent article.

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