Center for Freedom and Prosperity Foundation
For Immediate Release
Monday, June 8, 2015
202-285-0244
www.freedomandprosperity.org
New CF&P Paper Ties BEPS to OECD
War on Tax Competition
(Washington, D.C., Monday, June 8, 2015) The Center for Freedom and Prosperity Foundation (CF&P) released today a new paper on the OECD’s project on “base erosion and profit shifting” (BEPS). Authored by CF&P Director of Policy and Communications Brian Garst, the white paper argues the BEPS project endangers taxpayer privacy and the global economy.
Entitled “Making Sense of BEPS: The Latest OECD Assault on Tax Competition,” the paper attempts to answer why the OECD is rushing through a massive rewrite of global tax rules in order to address a problem that their own report indicated doesn’t exist when it acknowledged that corporate tax revenues have not declined. By examining organization documents and public statements, and putting the current initiative in context of other OECD projects, the paper demonstrates that the goal of BEPS is to further constrain low-tax jurisdictions and enable higher corporate taxes across the globe.
The paper’s author, Brian Garst, remarked, “The OECD wants the world obsessively focused on the BEPS process at the expense of the bigger picture. With everyone distracted with the effort to count ever individual bark on the corporate tax tree, they hope no one will notice that the forest is being cut down.”
“The OECD has made a mockery of its original mission to facilitate economic cooperation through liberalization. Now that its member nations have achieved their prosperity,” said CF&P President Andrew Quinlan, “they have hijacked the OECD to erect new barriers before other nations looking to follow suit.” He concluded, “It’s imperative that Congress get involved immediately to defend the interests of the U.S. and American businesses before its too late.”
Cato Institute Senior Fellow Dan Mitchell noted, “Since it’s dominated by European welfare states, the OECD’s attack on tax competition is unsurprising. But it’s a mystery why lawmakers in Washington send about $100 million to Paris every year to subsidize this bureaucracy that is now seeking to impose higher tax burdens on American companies competing in world markets.”
Link to the paper:
http://freedomandprosperity.org/2015/publications/making-sense-of-beps-the-latest-oecd-assault-on-tax-competition
Executive Summary:
The Organization for Economic Cooperation and Development (OECD) is directing considerable resources toward development of a new framework for taxation of multinational enterprises. According to tax bureaucrats at the OECD, the G20, and finance ministers from large welfare states, base erosion and profit shifting (BEPS) is a serious problem that requires drastic action. Without input from the United States Congress and other elected national bodies, they are rushing to rewrite the rules of global commerce. Available data does not support the contention that BEPS is a serious concern. Nevertheless, the OECD’s sweeping proposals to combat BEPS would create a privacy nightmare and stifle economic growth. Even if there were a problem, better policy responses are available. The simplest and most powerful being adoption of pro-growth tax rates. To make sense of the sudden push for a massive, multinational undertaking where costs are likely to be significant and benefits small at best, if they exist at all, the OECD’s project on BEPS must be viewed in the context of the organization’s long-standing war on tax competition.
For additional comments:
Andrew Quinlan can be reached at 202-285-0244, andy@freedomandprosperity.org
Brian Garst, Dir of Policy and Communications, can be reached at bgarst@freedomandprosperity.org
Dan Mitchell, Cato Institute Senior Fellow, can be reached at 202-218-4615, dmitchell@cato.org
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