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Posted on 10/01/2002 4:10:37 PM PDT by Tailgunner Joe
A truly civilized, wealth-respecting world would observe capital flight and brain drains, recoil in horror and stop penalizing success. It would cut tax rates and regulation and cease calling wealth-makers as criminals who deserve a noose – or deportation.
But this is not the response we’re seeing today. Instead there are calls for ever-greater tax burdens, ever-more regulation and ever-less financial privacy. Indeed, as we noted at the outset of our report, there also have been calls for an “International Tax Organization” (ITO) that would impose taxes globally. The ITO would be modeled on the World Trade Organization (WTO) which, in its brief history, already has run roughshod over the sovereignty of nations.
ITO taxes – to be collected by the U.N. from taxpayers in industrialized (and tax haven) nations – would be redistributed to poor nations in the form of foreign “aid.” In short, the burden of today’s national welfare states would be heightened by adding an international welfare state. Instead of scaling back individual welfare states – which are the ultimate cause of high tax burdens and indirectly, of capital flight to tax havens – this proposal would impose the burden of welfare statism uniformly on the entire planet.
The push for a “world tax” to “fight global poverty” was first proposed by the head of the U.N. in 1996. In June 2001 the U.N. stepped up its campaign, specifically in a report written by its “High Level Panel on Financing for Development.” That report spells out the role of an International Tax Organization (ITO).65 The U.N. not only endorses the OECD’s efforts to eliminate tax havens, it also proposes three new taxes:
1) a tax on foreign exchange transactions (the “Tobin Tax”),
2) a tax on carbon dioxide emissions, and
3) a tax on the emigration of the wealthy and successful (the “brain drain tax”)
On this third tax, the U.N. argues that:
Sadly, increasing polarization between the haves and the have-nots has become a feature of our world. Reversing this shameful trend is the pre-eminent moral and humanitarian challenge of our age
...It is time for governments to start working together to develop forms of international cooperation to optimize collectively the benefits of the movement of labor across national borders. . . . The international community should consider the potential benefits of . . . the taxation of capital flight and . . . the taxation of emigrant income. (emphasis added)
Those “benefits,” says the U.N., include obtaining tax revenues on those who emigrate from punitive regimes to less punitive or attractive “tax haven” regimes. The U.N. also recommends a world-wide effort to confiscate and redistribute intellectual property. Its report argues that there should be:
A reconsideration of trade-related intellectual property protection, with a view, among other things, to seeking ways to achieve low-cost availability of inventions without affecting the incentive to innovate. (emphasis added)
“Low–cost availability” means theft. Instead of removing or reducing the oppressive regulation and taxation that makes capital or talented individuals flee, the U.N. argues for confiscating their income, their wealth and any intellectual property they may possess, on their way out the door. Its basic premise is that successful individuals are effectively human chattel, to be exploited by governments – not only while trying to live in oppressive regimes, but while trying to flee them.
Barbarism. For world “leaders” to add insult to injury in this way is the height (or more accurately, the depth) of barbarism. It means the world is being led by entities who are oblivious to the pre-conditions of wealth-creation and freedom. The U.N.’s proposed tax on the “brain drain” is actually a revival of a proposal first outlined in 1976, when an entire book was devoted to the topic: Taxing the Brain Drain.66 Was that a “non-mainstream” book? Not at all. Its editors taught at MIT and the London School of Economics.
Those who think it’s far-fetched that an ITO could ever be formed – or that it could ever impose such taxes – should recognize that major, respected institutions back the idea, that those institutions have the U.S. government as a leading member and sponsor and that the same skepticism was expressed about the formation (and powers) of the World Trade Organization. Even run-of-the-mill financial publications today are pushing hard for such global taxing powers. According to The Economist, a “solution” to the problem of “insufficient tax revenues” is needed that goes beyond shutdowns of tax havens:
Governments may be able to pool their sovereignty by joining international bodies . . . [But] the OECD lacks sufficient clout, especially over non-members. . . . Some policymakers think that a World Tax Organization should take its place alongside institutions such as the U.N., NATO, the IMF, the World Bank and the World Trade Organization.67
The ITO proposal was introduced last March at the foreign aid summit in Mexico. Its leading advocates were Britain, Germany and “two Nordic countries.” The U.S. officially opposed it, but not in principle: it merely opposed adopting it “at this time.” The head of the U.S. International Agency, Patrick Cronin said “some people are saying, ‘Let’s tax the wealthy and say later how to spend it.’” But, he said, “that approach would “put the cart before the horse” because Third World spending projects should be identified first (before “taxing the wealthy”). Of course, no one at the summit was at a loss for ways of throwing more wealth down Third World rat-holes. They need only present such programs to governments that would appoint people like Cronin. “At the right time,” Cronin says, “there could be a serious discussion” about a global tax.68
This is how governments become totalitarian. They begin with a few controls and some taxation of income. But those controls and burdens cause enormous problems and poverty, which (allegedly) necessitate still further controls. Eventually, there are total controls. That’s what “totalitarian” means – and that’s where international tax policy seems headed, with the overt endorsement of the U.S.
There are a few voices of reason on these issues, but they’re usually those of tax-payers, not tax-assessors. Lewis Teffeau, Chairman of CC3, based in Pennsylvania, has written that:
The oil industry pays more in taxes than it makes in profits. That applies to a broad spectrum of industries, maybe to almost every industry. The largest profit-maker on a pack of cigarettes, a bottle of liquor and a gallon of gasoline is the taxing authorities. Not only does the government take the largest single portion of profit, in cash, from our business, but it is also paid in advance. And if we don’t pay enough, it assesses penalties and interest on what, in effect, we don’t even owe yet. But what’s most reprehensible is that for this “profit” government takes no risk, provides no capital, no expertise. . . . It is unconscionable that the single largest beneficiary of economic activity is the government, not hard-working people. Remember, the easiest way to subjugate a people is to confiscate their assets. When you have to erect the equivalent of the Berlin Wall to keep your corporations and individuals from fleeing oppressive taxation, something’s wrong.69 (emphasis added)
He’s right that new Berlin Walls are being proposed and built – walls of taxation, including proposals to tax capital flight. Instead of video footage of escapees running amid a hail of bullets, people will only see the results of what is, in effect, a similar policy, toward capitalists: a stagnation or gradual decline in entrepreneurial activity, in wealth-creation, in living standards and in the general vibrancy of cultures.
-- Richard M. Salsman is president and chief market strategist for Intermarket Forecasting, Inc., based in Cambridge, Massachusetts. www.intermarketforecasting.com
References:
65 U.N., “High Level International Intergovernmental Consideration of Financing for Development,” June 25, 2001 (available at http://www.un.org/esa/ffd/a55-1000.pdf).
66 Jagdish. N. Bhagwati and Martin Partington, Editors, Taxing the Brain Drain: a Proposal (Amsterdam: North Holland Publishing Company, 1976).
67 The Economist, The Mystery of the Vanishing Taxpayer,” Special Supplement, January 29, 2000, p. 9.
68 Ben Barber, “U.S. Spurns Renewed Calls for World Tax,” The Washington Times, March 20, 2002.
69 Lewis Teffeau, Letter-to-the-Editor, Investor’s Business Daily, May 20, 2002, p. A17.
No - the American sheeple pay those taxes!
Exxon and Shell are corporations. Taxing them - when nearly everyone uses their product heavily - only means taxing their consumers.
It's time for the sheeple to wake up to reality when liberals talk about raising "corporate" taxes.
The "John Saxon" essays - by an angry blue-collar Southerner, for others like him!
There are always calls for that in the UN. Repeating them in an essay does not support the author's premises that there's a Trend Toward Totalitarian Government. We have a president that made marginal progress toward reducing government funding as a percent of GDP until the Senate slipped back to the Democrats. He gave them half of what they wanted in hopes of gaining it back, and prospects look good.
We are at worse treading water, but that of course won't stop the kooks from posting the same tired and slippery "Republicrat" platitudes with lots of explanation points in response to this. I've defeated them to many times to respond again.
But they control what we are allowed to know about history , so their plans work over and over. As they say those who don't learn from history are doomed to repeat it. Their propaganda works well as anyone on FR can see by the attacks on the people who try to expose them , who are called " conspiracy nuts " , "whackos " , " Tin foil hat candidates " and on and on.
All this even with quotes in their own words proclaiming such plans.
I understand that there will be wannabe's and minions to run interference for them. The part that gets me is the willingness to remain servants to these bastards who profit from our deaths in wars down to shipping our jobs out of this country to help lower our country's standards , by the rest of you.
And there will be people who have already accepted a lower level of Life for themselves and their families. But to then call themselves AMERICANS and PATRIOTS. They should just accept the fact that they are leeches and are sucking this society down to nothing.
An animal tries to protect its young , I don't know if there is a definition for what these leeches are doing.There are animals , fish and insects that eat their young , but I still can't come up with a word to fit them.
I guess " nothing " fits because that's what they are and what they offer to our society. But for the rest of us to sit idly by and watch it happen like it won't touch us , because they are afraid of what others will think , or because it interferes with their plans for that day , or because they don't care enough to look at the Truth that is out there for all to see.
It's easier today , to not be involved. Tomorrow , easy won't exist anymore..........
Instead of removing or reducing the oppressive regulation and taxation that makes capital or talented individuals flee, the U.N. argues for confiscating their income, their wealth and any intellectual property they may possess, on their way out the door.
This kind of proposal is actually contributing to the problem, rather than to the solution.
Keep in mind that the wealthy didn't get that way by being stupid. Count on it. They are keeping a close eye on such activity, both in the UN and in our own government. Many are already leaving for similar reasons (see Tick-Tick-Tick - The Economy Bomb) and should it become obvious that such an international tax would likely become law in the near future, we will see a vast shift in wealth to offshore jurisdictions, before such a law could be enacted.
Roughly 100,000 Americans took all their money and expatriated last year. If an ITO should ever get close to becoming law, we would likely see that many and more wealthy Americans leave in a single month.
The wealthy are not going to allow themselves to be cornered (at least, most of them won't). History has shown that every time any government makes a move to punish capital flight, capital flight actually spikes. When the UN calls for such a move and the US gives tacit agreement, as it has, you can expect a similar jump in capital flight. Add that to the numbers leaving as a result of the USA Patriot Act and you can see that we may well have a really serious problem brewing here.
Even if such a program were to become law before most of the wealthy could leave, there would still be a major jump in capital flight. The reason is that those who are caught behind such an economic Berlin Wall will fear, quite justifiably, that even more punitive actions will follow. Even if leaving means losing a large portion of their wealth, it's better than staying and losing it all.
The answer isn't to punish capital flight. In all of history, that has never worked.
The answer is to reward capital retention.
Unfortunately, not only the expected Democrats, but even Republicans in Congress and the Whitehouse, seem content to lead us further down the road to global Socialism, in the form of an ITO. After all, rewarding capital retention, would mean a loss of power to those in power and even Republican lawmakers have trouble giving up power.
We have a president that made marginal progress toward reducing government funding as a percent of GDP until the Senate slipped back to the Democrats.
From the above article:
The U.S. officially opposed it, but not in principle: it merely opposed adopting it “at this time.”
That's the position of the Dubya administration. The only difference between Dubya and the socialists who push this garbage is that Dubya's handlers know that the only way to achieve such goals is to go slow. The leaders of socialist philosophy introduce the broad concept and leave it to people like Dubya to cut it back, knowing that he will not stand firm for capitalism and the Constitution and they will get yet another small piece of socialism enacted. He never has stood firm for the Constitution and likely never will.
The Dubya administration opposes the ITO "at this time". But, count on it. They do not oppose it in principle. Just like his daddy, Dubya will allow himself to be beat down and agree to unconstitutional compromises that lead to ever larger government, instead of vetoing bad legislation and using the bully pulpit of the Presidency to hold the Senate's feet to the fire. Klinton faced down two houses of Congress held by Republicans and made them bow to his wishes on the budget. But, don't expect such boldness from the current occupant of the Whitehouse, even though he only has to face down one house. And, it's not because he doesn't have the spine (though we have no indication that he does). It's because he too, is wants to see bigger government. The only difference is that he wants to be the one in control.
I'm just hoping that I can find someone better than Harry Browne to vote for in two years. He lost my vote with his antics a week ago and Dubya never had my vote. Hopefully the Constitution Party or the Libertarians will nominate a real leader. Although I grant that Dubya has done a little better in prosecuting the War on Terrorism, than algore would have, he has wreaked havoc on the Constitution by signing the USA Patriot Act (not to mention Campaign Finance Reform). As long as the Republican voters continue to accept pseudo-conservatives like Dubya, we will indeed continue the trend toward Totalitarian Government. We need a true constitutionalist in the Whitehouse, who will put the country ahead of his own poll numbers. But alas, I fear that may never happen.
What took you so long? I was expecting this idiotic garbage to come from someone yesterday. LOL!
Ben there, done that, saw the error of my ways and grew past it.
But, there's an idea. Maybe we could draft Paul O'Neill for the GOP presidential candidacy in two years. It's a real shame that Dubya places him in such an influential position and then handcuffs him. It must must really tear him up inside, having to decide every day, whether to stay where he's at, knowing that he stands little chance of influencing Dubya to lean more to the conservative side or to stand up and say that he can no longer be a puppet, just mouthing Dubya's pseudo-conservative rhetoric, knowing that few Republican voters would listen.
Too bad we don't have a young version of Ronald Reagan waiting in the wings, to replace Dubya.
He signed CFR, the farm bill, tried to set up the TIPs gestapo and generally started enlarging the government at every opprotunity after Cheney was seperated from him following 9/11.
The political situation of this country makes me quite pessimistic. 3rd parties will never win( and a lot of big L libertarians have some very bad foreign policy ideas) and the Republican party has to some degree been infiltrated by socialist( about to be made worse by the imminent retirement of some of the few remaining true conservartives Armey, Thurmond, Helms, Gramm) if the socialist control both parties completely then its all over.
In Alexander Tyler's Democracy cycle we are approaching the dependency phase if we are not there already.
I didn't know much about O'Neill, but I took a few minutes to read 3-4 articles mentioning him here. He sounds like a very good man, and I agree that it would be wonderful to have a contender who could consistently articulate conservative principles like Reagan who was politically viable.
I've heard that executive branch agencies don't turn on a dime with each election, and I've heard criticism that it's almost irrelevant who's in the White House for a short time. Agencies are staffed many levels down by the same people doing about the same thing and it takes generations to thoroughly work in a new culture. It would take an overtly revolutionary administration to break that barrier. Not a "New Democrat" like Clinton or a "Compassionate Conservative" like Bush.
I think a revolutionarily conservative will appear when the nation's ready to support one. And that takes education reform, as much as we can get away with. Otherwise it would be like sending a race hoarse into lions den. He wouldn’t have a chance to sprint, he'd just be dinner for the lions. Perhaps O'Neill recognizes something like that, maybe even considering it principled behavior.
In Alexander Tyler's Democracy cycle we are approaching the dependency phase if we are not there already.
You are so right.
For those who are not already familiar with Tytler's observation, it can be found at:
The next step is, indeed, the last one and our collective foot is already raised for that last step. Is it any wonder that wealthy Americans are fleeing our shores in record numbers? They aren't leaving in such huge numbers to avoid a few points in taxes (they pay some taxes wherever they go). They are fleeing to escape the looming bondage, of which Tytler speaks.
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