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October 8, 2004
U.S. Senate Appropriations Bill Would Revoke
OECD Funding Over Tax Policy
by Cordia Scott
(Excerpt of article below. Full article can be found at http://www.taxanalysts.com/
www/website.nsf/Web/WorldwideTaxDaily?OpenDocument)
The U.S. Senate Appropriations Committee has approved a funding bill that contains language barring the U.S. government from funding the OECD if the OECD has tried to identify,
report on, or penalize any country that encourages foreign investment through tax incentives.
The U.S. Senate Appropriations Committee has approved S. 2809, a funding bill that contains
language barring the U.S. government from funding the OECD if the OECD has tried to identify, report on, or penalize any country that encourages foreign investment through tax incentives. The United States currently
contributes approximately US $60 million to the OECD, or 25 percent of the multinational organization's budget.
...The full Senate has yet to consider S. 2809, the fiscal 2005 appropriation for the
Departments of Commerce, Justice, and State and the U.S. federal judiciary. the Appropriations Committee reported S. 2809 out on September 15.
Section 412(a) of S. 2809 states:
None of the funds appropriated in this Act or any other act making appropriations for the Departments of Commerce, Justice, State, the Judiciary, and related agencies may be made available
to the Organisation for Economic Co-operation and Development unless the Secretary of State certifies to the Committee on Appropriations of the Senate and the Committee on Appropriations of the House of
Representatives that such Organisation has not engaged in any activity to identify, report on, or penalize any country that encourages foreign investment through the adoption of tax incentives.
... Dan Mitchell, an economist at the conservative Heritage Foundation think tank in Washington, and Andrew Quinlan, president of the Center for Freedom and Prosperity, along with a contingent
of pro-market tax groups, have been lobbying the U.S. government for several years to take the OECD to task for what Mitchell calls its "anti-U.S. agenda." Nevertheless, the Senate committee's action took
them all by surprise.
"Our goal was to influence whatever happens next year in terms of the budget introduced by the administration and the outcome of the appropriations
process," Mitchell said. "But because there's been such receptivity to our message even without us asking, things have started moving along much faster than we thought, and that's why we have this Senate
committee language."
Mitchell said. ". . . the whole purpose is to send a shot across the bow and let the OECD know that we're getting a little bit tired that they continue to
push these antimarket initiatives."
... If the language restricting U.S. funding for the OECD survives in the appropriation bill that is eventually enacted, the potential resulting
loss of 25 percent of its funding could be devastating to the OECD. "The OECD does a lot of good things," Quinlan said, "but the people we talked to [in Congress] feel the [OECD's] Fiscal Affairs
Committee has gone rogue and needs to be pulled back."
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