January 23, 2002 | Commentary on Taxes
Specifically, the U.N.'s upcoming "Financing for Development"
conference is meant to boost foreign aid spending. To finance their
scheme, the bureaucrats want to create a World Tax Organization
with the power to impose global taxes.
U.N. bureaucrats still believe that big government is a magic
elixir, whatever the ill. They're peddling the same snake oil to
the Third World, but their prescription -- more government handouts
-- is a recipe for failure. And they want the United States to pick
up most of the tab.
Consider the recommendations of a panel the U.N.
secretary-general appointed to develop proposals for the Mexico
conference. The panel, which included former U.S. Treasury
Secretary Robert Rubin, called for:
An International Tax Organization
If you think our tax code is a mess -- and it is -- wait until the same international bureaucrats who rail against "harmful competition" from low-tax nations get their hands on it. Many of these people make the IRS seem like the taxpayer's best friend.
The United Nations wants the power to levy worldwide taxes, and the panel identifies currency taxes and energy taxes as the most likely targets. Such taxes are designed to do one thing: Redistribute income from developed nations to the Third World. Not surprisingly, they would hit U.S. taxpayers the hardest.
The United Nations wants "information exchange," a form of tax harmonization that would let high-tax nations impose their tax laws on income earned in America. This scheme is supported by an unholy alliance of European welfare states and corrupt Third World regimes.
Last, but not least, the U.N. panel argues that people should be tax slaves to their country of birth. For example, if a computer programmer from the Third World comes to Silicon Valley, the Third World country, rather than America, would have the primary right to tax his income.
These proposals may sound too ridiculous to be true, but the evidence can be found on the U.N. Web site (links to its report can be found at www.freedomandprosperity.org).
To make matters worse, it appears the United Nations is moving
to adopt these radical recommendations. U.N. officials recently
released preliminary language they hope will be in the final
report. They promised to "give careful consideration … to
the results of the study requested by the Secretary-General on
possible innovative sources of multilateral finance." Translation:
Let's hit up Uncle Sam.
The draft language endorses "international tax cooperation to
enhance the scope of national fiscal efforts," which means the
United Nations wants to create a tax cartel. This
OPEC-for-politicians might be good news for non-competitive
socialist governments such as France, but it would undermine
America's competitive advantage in the global economy.
The report also calls for a huge boost in foreign aid, up to "the annual equivalent of 0.7 percent of industrialized countries' gross national product." That may not sound like much, but it would cause America's foreign aid spending to skyrocket, from $12 billion a year to more than $70 billion.
And this doesn't even include spending for "global public
goods," which U.N. bureaucrats say will require "additional
funding." They apparently have a limitless appetite when America is
footing the bill.
The U.N. report is also noteworthy for what it doesn't include.
The purpose is to boost economic growth in the Third World, but
there isn't a single mention of the benefits of tax cuts and lower
tax rates, both of which spur economic development. It also fails
to discuss the need for governments to control wasteful
The report does briefly highlight the need for free trade. It
even makes a veiled endorsement of personal retirement accounts.
But these concessions to free-market economics are rare
And they can't make up for the real problem, which is that U.N.
bureaucrats are ideologically wedded to a big-government view of
the world. They want more taxes and more spending, even though
these policies make it harder for nations to prosper.
President Bush should tell the U.S. delegates to the Mexico conference to refuse to sign off on this scheme. If other nations want to tax themselves into oblivion, that's their business. But leave us out.
Daniel Mitchell is the McKenna senior fellow in political economy at The Heritage Foundation, a Washington-based public policy research institute.
Distributed nationally on the Knight-Ridder Tribune Wire