Many politicians seem to think that 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) that would have the power 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 the
creation of 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 the creation of an ITO said that 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 that 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 of these 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 levels of 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 rate, 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.
For example, Rep. John Sweeney, R-N.Y., has introduced legislation
that would 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 (heritage.org), a Washington-based public
policy research institute.