Sunday, December 21, 2003

No bad idea goes unpursued

Daniel J. Mitchell in Capitalism Magazine - Radical U.N. Tax Plans Threaten America
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 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.
That's certainly good news. Even better news is that our taxes pay for them to think up this kind of stuff.

But there's more:
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.
I know, I know - they spend all their time thinking up annoying stuff like this.
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?
Could we trust any Donk to veto it?
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.
How about ending all their funding regardless?