A US-based group called the Coalition for Tax Competition has sent a letter to the White House's Office of Management and Budget calling for a sharp reduction in funding to the Paris-based Organisation for Economic Cooperation and Development (OECD).
The group argues that the OECD's initiative in coordinating an international response to international tax competition adversely affects US interests. It bases its position on a study recently published by the Center for Freedom & Prosperity entitled, The Paris-Based Organization for Economic Cooperation and Development: Pushing Anti-U.S. Policies with American Tax Dollars.
The abstract is as follows:
After decades of gathering statistics and publishing innocuous studies, the Organization for Economic Cooperation and Development (OECD) has entered the realm of policy-making. Unfortunately, even though it is heavily subsidized by American taxpayers, the OECD generally promotes policies that are contrary to U.S. economic interests. This is particularly true in the field of fiscal policy, where the international bureaucracy endorses higher taxes, more spending, and tax harmonization. These policies may be in the short-term interest of the high-tax nations that dominate OECD decision-making, but they surely are not in the interests of the United States. The OECD’s statist approach to policy is particularly disturbing since American taxpayers pay more than $70 million annually for the putative privilege of belonging to the Paris-based bureaucracy.
Tax competition does have the potential to reduce taxes, particularly on more mobile tax bases (i.e. capital), which can more readily respond to tax initiatives. But the issue of whether aggressive tax competition is a good thing or a bad thing is open to debate; perhaps unsurprisingly the right answer is that it depends. One of the OECD's objectives in its campaign against Harmful Tax Practices has been to differentiate between legitimate competition and beggar thy neighbor policies (e.g. tax havens).
The calls made by the Coalition for Tax Competition are weakened by the fact that the OECD recognizes that some forms of tax competition are legitimate and unobjectionable. Of course, the fact that the OECD has taken a more even-handed approach to the issue of tax competition than the Coalition for Tax Competition itself probably won't appear in any headlines reporting on this call for defunding.