THE GLOBAL TAX REVOLUTION

Dangerous movements are afoot to control and limit tax competition.

Policymakers in international organizations such as the Organization for Economic Co-operation and Development (OECD), the European Commission and the United Nations (UN) want to create an OPEC for taxes to insulate governments from tax competition.

The good news is that the United States is uniquely situated to protect and advance global tax competition:

• Use American influence inside the OECD to kill the anti-tax competition project; the United States is the biggest funder of the OECD, providing nearly one-fourth the organization's budget.
• Reject European Union invitations to participate in cartel-like tax initiatives, such as the savings tax directive.
• Block possible UN schemes for global taxes, global tax regulations and a global tax organization.

One way to help ensure that American policies stay on the side of international tax competition is for us to proceed with domestic tax reform. If we proceed with major tax reforms and make the United States a magnet for investment and jobs, it will be much easier for policymakers and the public to understand the benefits of open tax competition.

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