Print this article
US Pro-Tax Competition Lobby Group Urges Congress To Slash Funding Of OECD
Tom Burroughes
28 October 2011
A lobby group campaigning to let jurisdictions set their own tax rates and engage in tax competition has urged US lawmakers to cut the $100 million taxpayer subsidy paid to the Organisation for Economic Co-Operation and Development, claiming the Paris-based group wants to kill off such freedom. The letter was sent by a group of organisations called the Coalition for Tax Competition. It said the US contributes a quarter of the entire OECD budget. Ironically, salaries by OECD staff are tax-free, even though this body regularly issues reports – as mentioned elsewhere by this publication – into the real and alleged shortcomings of offshore and onshore jurisdictions. The letter puts the CTC at odds with groups such as the Tax Justice Network, a lobby group claiming that low- or no-tax jurisdictions, including those operating tight privacy rules, distort global trade and draw billions of revenues from governments to the detriment of the poor. Governments, including that of the US, have piled pressure onto jurisdictions such as Switzerland to prevent a leakage of tax revenues, and it is an issue that has taken on fresh urgency as government deficits have ballooned. In reply, organisations such as the Cato Institute, a think tank in the US, claim such governments are trying to create a global tax cartel. In its letter, the Washington DC-based CTC said: “We have long been disturbed that the OECD has a 'harmful tax competition' project that seeks to hinder the flow of jobs and capital to low-tax nations. Since the US is the world's biggest beneficiary of international capital flows and tax competition, it is the height of folly for the American taxpayer to subsidise this effort.” “There is also a disturbing trend where the OECD endorses big government positions on domestic policy issues. The OECD has supported so-called 'stimulus' spending, advocated for cap-and-trade regulation, and suggested a value-added tax in the US, just to name a few examples. In effect, US taxpayers are subsidising further advocacy for bigger government and higher taxes - positions against their own interests,” the group said. Andrew Quinlan, President of the Center for Freedom and Prosperity and Coordinator for the Coalition for Tax Competition, added: “OECD bureaucrats have lived a fat and happy life using the US taxpayer dime. They have long received tax-free salaries, supplied in large part from US taxpayers, while jet-setting around the world and advocating for higher taxes. It’s time for the gravy train to end.”