April 23, 2001
OECD fiscal ambush
By Paul Craig Roberts
The year 1984 passed 17 years ago, but the horror forecast in George Orwell´s famous book "1984" is still creeping up on us. Big Brother now exists in several manifestations. One of them is the OECD (Organization for Economic Co-operation and Development), a collection of world government bureaucrats.
The OECD´s tentacles are not limited, like Big Brother´s, to Oceania alone, but reach throughout the world. Only the United States stands between the OECD and an international
high-tax cartel that spells the end of everyone´s financial privacy.
The OECD wants to "harmonize" taxes so residents of high-tax European welfare states will have nowhere to go with their life´s savings. Employing doublethink, the OECD
says its aim is only to stop tax cheats and money laundering.
In truth — if the word can still be used — the OECD´s proposal is designed to make it possible for governments to collect taxes and confiscate wealth on a worldwide basis. A
Frenchman, for example, who parks some money in Switzerland or the Cayman Islands with retirement in mind, will find his bank there required to report his holdings to the French government.
If Switzerland, the Cayman Islands or any of the 41 countries branded "tax havens" by the OECD don´t want to go along, the OECD intends to punish the countries by
isolating their banking systems from world commerce.
The success of the scheme depends on the United States joining, as there is no prospect of Big Brother, at this stage of his development, isolating the U.S. banking system. The
United States is wavering. Assistant Treasury Secretary for Tax Policy Mark Weinberger sees "many worthy elements" to the OECD´s plan. We only want to make sure, he says, that the plan does not have the
unintended consequence of making the OECD an extraterritorial tax authority that imposes tax laws and tax rates on independent countries.
Mr. Weinberger is already speaking in Newspeak. The plan most definitely imposes tax rates, because "tax havens," that is, all countries with lower tax rates than
European welfare states, would have to withhold taxes on deposits from abroad at the rates in effect in the depositors home countries.
There was a time when privacy was respected. Whatever its residual value today, privacy is just another casualty of the "war on crime."
Privacy is a feature of individuality, but individuality is becoming a feature of the past, increasingly consigned to the memory hole. Who can remember when their rights were more
important than a war on crime?
Fewer and fewer can remember. The OECD´s plan is just another step in the eradication of individuality. Appropriately enough, 1984 was the year the Comprehensive Forfeiture Act
passed in the United States. This law makes it possible for police and prosecutors to confiscate the assets of innocents on the basis of "probable cause" — that is, an assertion that the assets facilitated
a crime. For example, if a federal agent arranges a drug sting on your property, he can confiscate your property for "facilitating" a drug transaction.
The OECD´s plan is like gun registration. Its only purpose is to facilitate confiscation. Once there is worldwide withholding, wealth confiscation will become routine. No country,
no matter how abusive, will any longer have to fear capital flight as there will be no place for the capital to go.
We are losing our human qualities for no other reason than for life to be easier for government bureaucrats. Taxation is designed to strip people of individuality by making them
dependent on government. After tax, few people have anything beyond another week´s or month´s living expenses.
A free country would not permit this. In place of payroll and income taxes, people would be permitted to accumulate assets that would provide them with a measure of independence.
It is a great irony that in the 20th century, when the development of productivity and financial institutions made it possible for most everyone to achieve independence, governments stepped in with taxation to keep
populations in the same dependent state as medieval serfs.
Individuality is becoming an atavistic conception. In its place is the Regulated Person. The Regulated Person is liberated from good manners and sexual morality, but other than
sexual acts little else remains private.
Paul Craig Roberts is a nationally syndicated columnist.