Not only that, but Mark Warner, a former OECD legal adviser, contends that the proposed blacklist of low-tax nations could constitute improper discrimination under international trade agreements. That's not surprising, since the trade laws are supposed to foster open competition, not tax cartels. The last time we checked, the OECD had an obligation to promote economic growth and expansion of trade. Traditionally, OECD officials have warned against the harmful economic impacts of cartels. The OECD nations have also recommended that poorer countries develop competitive tax systems and promote the financial services industry to help diversify their economies, and provide insurance against fluctuating prices of the natural resources and commodities on which many less developed nations depend.
Tax competition forces governments to cater to the needs of taxpayers in the global economy.
The Reagan tax-rate reductions are a perfect example of productive tax competition. After the U.S. cut tax rates in the 1980s, nations around the world lowered tax rates in order to compete with the U.S. tax-rate reductions, and the global economy experienced an unprecedented boom. Before this goes any further, it is incumbent on the Bush administration to pull the plug on the OECD's high-tax bullying. It's no surprise that members of the Congressional Black Caucus, including ranking Ways and Means Committee Democrat Charlie Rangel, have written to Treasury Secretary O'Neill urging the administration to withdraw support for the OECD assault on tax competition. Everyone who embraces the aspirations of all peoples of the world to achieve economic success should send the same message to his own government.