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International Taxes Threaten Fiscal Sovereignty

International Taxes Threaten Fiscal Sovereignty

Posted on April 17, 2012 by Brian Garst

Politicians are always looking for ways to increase their power and exert ever more authority over greater swaths of humanity. Generally speaking, the world system of nation-states at least keeps to a minimum the number of politicians capable of pushing their views on any particular populace. The increasing move toward international governance and greater authority for unelected international bodies pose a threat to this system. Even elected politicians are increasingly grasping for ways to control more than just their own electorate.

A recent story out of Europe highlights one such effort by Europe’s climate commissioner, Connie Hedegaard:

…The biggest source of controversy has been the EU’s insistence that other nations’ airlines pay for their carbon emissions on flights that take off or land in Europe – a policy that Washington, Beijing and Moscow have decried as an infringement on their sovereignty.

To the alarm of Airbus, the European aerospace company, the Chinese have suggested that it would be sensible for their fast-growing airlines to shop elsewhere for new aircraft if Europe does not reconsider the policy. Ms Hedegaard has also taken a hard line against oil derived from tar sands – a stance that has attracted far less attention than the airline row, but which has threatened a pending EU-Canada free trade agreement.

Asked if there might be some compromise to the aviation controversy, Ms Hedegaard said she would not even consider it…

Ms. Hedegaard represents just the latest in a long line of opportunist politicians looking to use whatever cause happens to be popular at the time to impose global taxes. Even worse is when international organizations try to do it. A decade ago, the UN began the call for a financial transactions tax to fund a slush fund for “development assistance,” a euphemism for funneling money to corrupt and incompetent third world governments, thereby subsidizing their tenuous and often violent grips on power. The financial transaction proposal has remained a popular solution for all sorts of global ills, and even has the support of Bill Gates. The World Health Organization is even looking to take advantage of the successful demonization of tobacco companies as an excuse to collect cigarette taxes to directly fund their organization.

The fundamental problem with all of these efforts to fund international bodies through direct or indirect taxes is that they undermine the basis of legitimate, democratic governance. No one at these organizations faces elections, they don’t operate with much transparency, and most people have little idea what they actually do. Voters cannot easily trace their contributions to these bodies, and have no real means to influence their agenda.

The more intermediate levels that exist between taxpayers and those that they fund, the less accountable those bodies will necessarily be. So while allowing one nation or group of nations to impose global taxes is an attack on the sovereignty of others and a problem in its own right, allowing international organizations with no true sovereignty of their own to impose taxes on all undermines the very fabric of representative government.


Global Tax Global Taxation
April 17, 2012
Brian Garst

Brian Garst

Brian Garst is Vice President of the Center for Freedom and Prosperity.

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