The Organization for Economic Cooperation and Development is a Paris-based international bureaucracy. It used to engage in relatively benign activities such as data collection, but now focuses on promoting policies to expand the size and scope of government.
That’s troubling, particularly since the biggest share of the OECD’s budget comes from American taxpayers. So we’re subsidizing a bureaucracy that uses our money to advocate policies that will result in even more of our money being redistributed by governments.
Adding insult to injury, the OECD’s shift to left-wing advocacy has been accompanied by a lowering of intellectual standards. Here are some recent examples of the bureaucracy’s sloppy and/or dishonest output.
Deceptively manipulating data to make preposterous claims that differing income levels somehow dampen economic growth.
Falsely asserting that there is more poverty in the United States than in poor nations such as Greece, Portugal, Turkey, and Hungary.
Cooperating with leftist ideologues from the AFL-CIO and Occupy movement to advance Obama’s ideologically driven fiscal policies.
Peddling dishonest gender wage data, numbers so misleading that they’ve been disavowed by a member of Obama’s Council of Economic Advisers.
Given this list of embarrassing errors, you probably won’t be surprised by the OECD’s latest foray into ideology-over-accuracy analysis.
As part of its project to impose higher taxes on companies, here’s what the OECD is claiming in a recent release.
Corporate tax revenues have been falling across OECD countries since the global economic crisis, putting greater pressure on individual taxpayers… “Corporate taxpayers continue finding ways to pay less, while individuals end up footing the bill,” said Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration. “The great majority of all tax rises seen since the crisis have fallen on individuals through higher social security contributions, value added taxes and income taxes. This underlines the urgency of efforts to ensure that corporations pay their fair share.” These efforts are focused on the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project.
And what evidence does the OECD have to justify this assertion?
Here’s what the bureaucracy wrote.
Average revenues from corporate incomes and gains fell from 3.6% to 2.8% of gross domestic product (GDP) over the 2007-14 period. Revenues from individual income tax grew from 8.8% to 8.9% and VAT revenues grew from 6.5% to 6.8% over the same period.
Those are relatively small shifts in tax receipts as a share of GDP, so one certainly could say that the OECD bureaucrats are trying to make a mountain out of a molehill.
But that would mean that they’re merely guilty of exaggeration.
The much bigger problem is that the OECD is disingenuously cherry-picking data, the kind of methodological mendacity you might expect from an intern in the basement of the White House, but not from supposed professionals.
If you go to the OECD’s website and click on the page where the corporate tax data is found, you’ll actually discover that corporate tax receipts have been slowly climbing as a share of GDP.
Yes, receipts are slightly lower than they were at the peak of the financial bubble.
However, honest analysts would never claim that those numbers were either sustainable or appropriate to use as a bennchmark.
Sadly, “honest” and “OECD” are words that don’t really belong together any more.
The bureaucrats in Paris also are being mendacious in their portrayal of what’s happening with individual income tax revenues.
Monsieur Saint-Amans wants us to think that falling corporate tax receipts are being offset by a rising burden on individuals, but check out this table from the OECD’s Revenue Statistics. As you can see, he wants us to look at one tree (what’s happened in the past few years) and ignore the forest (the fact that the burden of the personal income tax today is lower than it was in 1980, 1990, or 2000).
By the way, the real story is that the OECD wants higher tax burdens, period. Anytime, anywhere, and on everybody.
It’s attack on low-tax jurisdictions is designed to enable higher income tax burdens on individuals.
Its “base erosion and profit shifting” project is designed to facilitate higher income tax burdens on companies.
And the bureaucrats reflexively advocate higher value-added tax burdens.
All of what you might expect from an organization filled with overpaid officials who realize their cosseted lifestyle is dependent on producing output that will generate continuing subsidies from statist politicians such as Obama and Hollande.
P.S. If you want an amazing example of the OECD’s ideology-over-analysis approach, here’s what the bureaucrats recently wrote about achieving more growth in Asia.
Increasing tax revenues and ensuring sustainable domestic resource mobilisation will be critical as emerging Asian economies seek to boost the provision of public goods and services and improve economic growth and living standards. …Comparable and consistent tax statistics facilitate transparent policy dialogue and provide policy makers with an important tool to assess alternative tax reforms. …Continued reforms will be necessary to help these tax administrations raise additional tax revenues in the future.
Yup, you read correctly (at least if you understand that “domestic resource mobilisation” is OECD-speak for higher taxes). The bureaucrats think generating more tax revenue to finance bigger government actually is a recipe for more prosperity.
For all intents and purposes, they’re advising nations in the region to copy France and Italy instead of seeking to be more like Hong Kong and Singapore.
Though, to be fair, the OECD isn’t just trying to impose bad policy on Asia. The bureaucrats in Paris have an equal-opportunity mindset when advocating statism since that’s the exact same prescription the OECD gave for Latin America.
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[…] I’ve pointed out that the OECD has an unseemly pattern of dishonest data manipulation, I feel compelled to give them […]
[…] I’ve pointed out that the OECD has an unseemly pattern of dishonest data manipulation, I feel compelled to give them […]
[…] Reposted from International Liberty […]
The entire OECD organization is supported by taxes. And the decision to give those taxes to the OECD is taken by rulers who are themselves supported by taxes. So OECD is helping the rulers that give them life sell more taxes to their citizens.
So of course taxes are good, they improve economic performance, stimulate growth, lower global temperatures, cure cancer, slim your waste line, augment karma, make you a kinder, gentler, more productive and sexier person with lower cholesterol.
The bigger problem is that while a tiny portion of total tax goes to the OECD, a significant proportion goes to bribe voters into making their country a low growth euro-style nation whose decline compounds year after year at a precipitous pace in this early twenty first century.
The voter will buy. And his country will continue to suffer a 2-4% growth deficit compared to world average, swiftly compounding his international prosperity rankings into the middle income country group by mid century.
The few electorates that can deflect the song of these sirens are the ones that will prosper this century. There will be few. The others will see their once enviable developed world prosperity outranked and will join the middle income nations of the latter twenty first century.
So, in practical terms, the task for anyone who cares about their family’s future is to spot those electorates early, and join them.
Suggestions and intuition into this matter, insight that diverges from the group think of voter-lemmings, is welcome.
Anybody who has studied economics understands that the cost of tax compliance is 22% alone and that the taxes paid are both added to the cost of the product or service. Really a business does not pay taxes or the compliance costs, the customer pays both!
One always selfishly measures the value of any regulation by the direct effect it has on one’s life. SO, it is perfectly understood that government institutions measure economic prosperity by the amount of money a government takes in. After all- the more buffer zone they can put between themselves (on a personal level) and cave dwelling, the better, right? So, they have learned over time that the more they can control, the better the outcome for their (and by reason the generations of government bureaucrats they spawn) own well being. It’s like that poster of the dapper guy with his foot on the bumper of a Rolls Royce, and a champagne glass in his hand that says “poverty sucks”.
An issue/concept that should be addressed: Corporations may front the taxes but common sense suggests that it is just another expense that is passed along to consumers in the sales price of the product.