CF&P Foundation Press Release, Oct. 31, 2005

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Center for
Freedom and Prosperity
 P.O. Box 10882
Alexandria, Virginia

Center for Freedom and Prosperity Foundation

For Immediate Release
Monday, October 31, 2005

OECD Urges Higher Taxes in America –
Including A European-Style VAT
CF&P Says U.S. Should Stop Subsidizing OECD

Washington, DC (Monday, October 31, 2005) – Today, the Center for Freedom and Prosperity Foundation and several members of the Coalition for Tax Competition condemned the Organization for Economic Cooperation and Development (OECD) for its recent "Country Survey" of the United States.  In its survey, the Paris-based bureaucracy suggests that higher taxes are desirable and that America should adopt a value-added tax.

This is not the first time the OECD has tried to interfere with American public policy. Earlier this year, the OECD endorsed a scheme pushed by the United Nations to increase U.S. foreign aid spending by 450 percent -- from about $15 billion to more than $80 billion per year. And over the last seven-years the OECD's Committee on Fiscal Affairs has pursued a tax harmonization agenda that is contrary to the interests of the U.S. and other low-tax countries. Notwithstanding these radical views, the OECD receives about 25 percent of its budget – more than $60 million – from American taxpayers.

Public policy experts have reacted to the OECD's most recent assault against free market policy:

"Here we go again. Once again the OECD is pushing on the U.S. their Euro-centric, anti-American economic policies. It is time for the President and Congress to re-evaluate America's annual subsidy to the OECD. In fact, we should cut our contribution greatly, or zero it out all together," said Andrew Quinlan, president of the Center for Freedom and Prosperity Foundation.

Daniel Mitchell, senior fellow at the Heritage Foundation, commented, "A VAT would mean bigger government and economic stagnation. The OECD is supposed to recommend policies that increase growth, not policies that increase government. It is encouraging that Congress is finally reconsidering the wisdom of having U.S. taxpayers subsidize the Paris-based bureaucracy."

Veronique de Rugy, research fellow at the American Enterprise Institute, noted, "Not everything the OECD recommends is wrong, but the bureaucrats inevitably seem to be on the wrong side on key issues such as tax competition and the size of government."

Grover Norquist, president of Americans for Tax Reform, added, "The United States taxpayers should not foot the bill for a bloated European entity to demand higher taxes on the American people. We already pay Ted Kennedy to do that."

John Berthoud, president of the National Taxpayers Union, remarked, "It is disturbing to find a left-wing international bureaucracy calling for higher taxes in America. But to add insult to injury, the OECD is using American tax dollars to promote this anti-American agenda."

Karen Kerrigan, president of the Small Business & Entrepreneurship Council, stated, "By endorsing a VAT for the United States, the OECD has again demonstrated that it is a pro-big government European bureaucracy. American taxpayers should not be subsidizing an organization that reflects the statist vision of high-tax welfare states such as France."

Tom Giovanetti, president of the Institute for Policy Innovation, added, "As usual, OECD economists make correct observations of the problems, but propose exactly the wrong solutions. While rightly advising entitlement reform, they propose raising Social Security payroll taxes and reducing benefits. While recognizing our current corporate tax regime as "grossly ineficient," they propose its replacement with a VAT, as well as implementation of Internet taxes."

The OECD's pro-tax increase and pro-tax harmonization agenda will be discussed in two weeks at a Tax Competition Conference co-hosted by the CF&P Foundation November 14th in Melbourne, Australia (link to more information on the conference).

Excerpts from OECD's Economic Survey of the United States, 2005:

    "…some increase in revenues will be necessary… a federal VAT should be considered. …retaining a personal income tax would allow the desired degree of progressivity of the overall tax system to be achieved. …assuming successful implementation of the Streamlined Sales and Use Tax Agreement, Congress should authorise them to require remote vendors to collect use tax on their behalf."

Source: October 2005, Organisation for Economic Co-operation and Development, Economic Survey of the United States, 2005


For additional comments:

Andrew Quinlan can be reached at 202-285-0244,
Dan Mitchell can be reached at 202-608-6224,
Veronique de Rugy can be reached at 202-862-7165,
|Grover Norquist can be reached at 202-785-0266,
John Berthoud can be reached at 703-683-5700,
Karen Kerrigan can be reached at 202-785-0238,




Center for Freedom and Prosperity Foundation
P.O. Box 10882
Alexandria, Virginia 22310
Phone: 202-285-0244


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