The Organization for Economic Cooperation and Development (OECD), through its Global Forum on Transparency and Exchange of Information for Tax Purposes, claims that it is working to “ensure that all jurisdictions adhere to the same high standard of international cooperation in tax matters.” CF&P has long pointed out that the OECD’s real objective is to use this supposed “high standard of international cooperation” as a back-door means to protect high-tax jurisdictions by limiting tax competition. To accomplish this the OECD does two things: 1) It attacks low-tax jurisdictions and attempts to saddle them with restrictions reducing their attractiveness to foreign investment and, 2) it hypocritically ignores many of the very same policies it condemns in smaller jurisdictions when they are employed by the larger nations.
In other words, the OECD is a cartel whose purpose is to protect the interests of the politicians and tax bureaucrats of its member nations at the expense of sound economic policy and the global economy. To make matters worse, it has proven in the past that underhanded tactics are a perfectly acceptable means to advance the cartel’s interests.
Providing more evidence of the OECD’s hypocrisy is our friend Dr. Eduardo Morgan Jr., former ambassador of the Republic of Panama to the United States, whose report on the OECD’s peer review of the United States documents a litany of hypocrisies:
…the OECD continued to use the blacklists for direct attacks on their competitors, as originally planned. They coerced them into eliminating the so-called harmful tax competition, threatening them with sanctions if they failed to do so. Almost all small countries agree to submit, but a few, including Panama, conditioned their participation to the establishment of a level playing field, which basically means equal conditions for all players.
This attitude from countries like Panama who did not give in so easily created a real problem for the OECD; most, if not all of its members display characteristics that defined them as tax havens, including its main partner, the U.S., which is the largest, most secretive and major contributor the OECD’s annual budget.
…Needless to say, neither the OECD, nor its member countries dare to mention the double standards of the great empire which makes the OECD campaign against countries outside their cartel unethical and even more reprehensible.
…in the extensive and complex Peer Review Report, there is no reference whatsoever to the existence of the QI, nor that it does not levy taxes on interest or capital gains derived from bank deposits of foreign investors, nor that it does not provide such information to third countries (with the exception of Canada). But most striking is the fact that they do not have the mechanisms to enable affected countries to obtain this information, which is precisely what the OECD preaches through its “Global Forum On Transparency And Exchange Of Information For TaxPurposes”, and tries to impose on other countries across the world.
Our objective in pointing this out is not to suggest that the US should adopt bad policies just because it participates in forcing them on others. Rather, US policymakers should stop supporting an organization which insists not only that other nations handicap themselves, but in so doing also undermines tax competition and thus ensures less freedom and reduced prosperity across the globe. The point, in other words, is that the OECD is not a good faith actor on the international stage and the US should not be subsidizing its counterproductive behavior.
———
Image credit: OECD Organisation for Economic Co-operation and Development | CC BY-NC-ND 2.0.
