I then wrote in 2011 that eliminating subsidies for this statist bureaucracy was a “minimal test of GOP fiscal responsibility.”
And I followed up in 2012 by noting that sending America tax dollars to Paris was – on a per-dollar basis – the most destructive part of the entire federal budget.
Sadly, nothing has changed. The OECD is still churning out propaganda, pushing for higher taxes in America and around the world.
Adding insult to injury, American taxpayers finance the biggest share of the OECD’s budget.
Those subsidies should have been eliminated decades ago. But better late than never. Those subsidies should be ended now. A perfect target for DOGE.
I made the case against the OECD last month in an article for IFC Review. Here are some excerpts.
Ronald Reagan and Margaret Thatcher had implemented major reductions in personal and business tax rates. …the US and UK tax reforms were so effective that other governments felt pressure to lower their tax rates. …Thanks to this virtuous cycle of tax competition, there was a 20-year-plus period of tax rate reductions. …So-called tax havens were a major factor in encouraging lower tax burdens… Needless to say, there were plenty of politicians who disapproved of this liberalising process. As far as they were concerned, tax competition was “harmful” and “unfair” since it hindered their ability to impose higher tax burdens. This is where the OECD began to play a pernicious role. …The bureaucrats in Paris were happy to become a vehicle for pushing tax harmonisation instead of tax competition. …The OECD’s first victory was the erosion of financial privacy. …The next step for the OECD is the proposed corporate tax cartel. …Once the OECD coerces all governments into that cartel, it is a good bet to predict that there will be further efforts for tax harmonisation. Some governments are already agitating for a global wealth tax… One approach is to discourage the OECD’s fiscal imperialism by threatening to reduce the bureaucracy’s funding. The United States is the biggest sponsor of the OECD, and the bureaucrats would not want to see their gravy train derailed. Especially since they receive rather generous tax-free salaries.
To elaborate, I’ll re-share this interview I did in 2017.
The bad news is that the OECD is still being subsidized by American taxpayers.
The good news is that Republicans may finally be irritated enough to derail the aforementioned gravy train.
The OECD’s global corporate tax cartel is largely designed to grab more money from American companies. Trump, to his credit, already has ended any American participation in that cartel.
In a column for the Hill, Jack Salmon of the Mercatus Center wrote about the latest developments in that fight.
While President Trump is currently shaking international norms, there is one area where his challenge to global institutions is profoundly good: ending America’s acquiescence to the Organisation for Economic Cooperation and Development’s tax cartel. On his first day back in office, Trump signed a memorandum making clear that this “Global Tax Deal” has “no force or effect” in the United States…, signaling a return to full U.S. tax sovereignty and a decisive rejection of European economic defeatism. For years, the OECD…has sought to impose a European-style model of high taxation and economic stagnation on the rest of the world. Its flagship initiative is a…scheme designed to siphon U.S. business revenues into the coffers of bloated European governments. …American companies would have borne nearly 60 percent of the cost… Trump’s memorandum should be just the beginning. If the OECD remains committed to undermining tax competition and redistributing American tax revenues to Europe, why should the U.S. continue to fund it?
I think program reductions are desperately needed and that will cause short-term pain for some Americans.
There’s no reason why pampered foreign bureaucrats (with lavish and tax-free compensation packages) should be spared. Especially when they are directly and indirectly trying to push higher taxes on American families and American businesses.
Dan Mitchell is co-founder of the Center for Freedom and Prosperity and Chairman of the Board. He is an expert in international tax competition and supply-side tax policy.
