Force countries with debilitating tax rates (such as the US) to compete with their lower-tax counterparts? Â Can’t allow that, now, can we?
Iâ€™ve beenÂ battling the Organization for Economic Cooperation for years, ever since the Paris-based bureaucracy unveiled its â€œharmful tax competitionâ€ project in the late 1990s. Controlled by Europeâ€™s high-tax welfare states, the OECD wants to prop up the fiscal systems of nations such as Greece and France by hindering the flow of jobs and capital to low-tax jurisdictions.
Guided by aÂ radical theory know as Capital Export Neutrality, the OECD wants to impose global tax rules that would prevent taxpayers from ever having the ability to benefit from better tax law in other jurisdictions. This is why, for instance, the international bureaucrats are anxious to undermine national tax laws â€“ such asÂ Americaâ€™s favorable treatment of bank deposits from overseas â€“ that enable people to escape onerous tax regimes.
Bolstered by support from the Obama Administration, the OECD now is taking its campaign to the next level. At its Global Tax Forum in Bermuda, which ends later today, the bureaucrats unveiled a new scheme that effectively would result in the creation of something akin to a World Tax Organization.
The vehicle for this effort is a Multilateral Convention on Mutual Administrative Assistance in Tax Matters. This may sound dry and technical, but the OECD wants all nations to participate in this pact, which has existed for a couple of decades but was radically expanded last year to give high-tax governments sweeping new powers to impose bad tax law on income generated in low-tax jurisdictions.
But the real smoking gun is that the OECD has put itself in charge of the â€œco-ordinating bodyâ€ that will have enormous powers to interpret the agreement, modify the pact, and resolve disputes â€“ thus giving itself the ability to serve as judge, jury, and executioner.