The UN Tax???? - The UN wants to tax us!

Many politicians seem to think that the answer to every alleged problem is higher taxes. Howard Dean, for instance, has said he would repeal the Bush tax cuts -- even though this would boost the average family’s tax burden by nearly $2,000.

This initiative sounds radical, and it is. But some proposals out there are even worse.

The United Nations, for instance, wants to create an International Tax Organization (ITO) that would have the power to interfere with national tax policies.

This crazy idea first surfaced two years ago in a report from the world body’s “High-Level Panel on Financing for Development.” Since then, the U.N. has been working to turn it into reality. For instance, U.N. General Secretary Kofi Annan recently called for the creation of a global tax commission. But no matter what it’s called, an international bureaucracy with power over tax policy would be an assault on American sovereignty.

An international tax organization, of course, would mean higher taxes and bigger government. Indeed, U.N. officials have been quite open about their intentions. The chairman of the U.N. panel that first endorsed the creation of an ITO said that it would “take a lead role in restraining tax competition.” According to this mentality, it’s unfair for America to have lower taxes than places such as France and Germany, especially if it means that jobs and investment flee Europe’s welfare states and come to America.

For all intents and purposes, the U.N. wants to create an “OPEC for politicians.” Governments would conspire to keep taxes high, and countries with free-market tax systems -- such as the United States, Switzerland, Ireland and Hong Kong -- would be targeted for persecution.

The U.N. also wants the power to levy its own taxes. The original report looked at two options, a tax on currency transactions and a tax on energy consumption. Both of these proposals would hit America hardest. But this is just the tip of the iceberg. In the past, the U.N. has endorsed new taxes on the Internet, including a tax on e-mail. Again, the U.S. economy would pay the lion’s share if this reckless idea took effect.

But the prize for the worst U.N. idea probably belongs to the proposal to give governments permanent taxing rights over emigrants. You see, the U.N. thinks it’s unfair when talented people leave high-tax socialist nations and move to places such as America. But since even the U.N. realizes it would be unacceptable to prohibit emigration, the bureaucrats are instead proposing to let governments tax income earned in other nations.

This scheme is a direct attack on American interests because of our high levels of immigration -- particularly the well-educated portion of the immigrant population. For instance, if a doctor from the Caribbean moves to America, his home government would get to tax income he earns here. If a Chinese entrepreneur moves to Silicon Valley, the Chinese government would get to tax his U.S. income.

Foreign-born workers in the United States, including both citizens and resident aliens, earn nearly $600 billion each year. Imagine the damage if foreign governments could tax that income. Even if they imposed only a 15 percent tax rate, foreign governments could drain nearly $100 billion from our economy.

There is an understandable temptation to dismiss these U.N. proposals as silly. After all, the United States can veto any bad initiatives. But this passive approach is a mistake. What would happen, say, if Howard Dean were president when the U.N. was voting whether to create an International Tax Organization? Could we trust him to veto this nutty scheme?

Another reason we should worry: The U.N. is just one of several international bureaucracies working to undermine fiscal sovereignty. The Paris-based Organization for Economic Cooperation and Development (OECD) targets “harmful tax competition” and the Brussels-based European Union enthusiastically backs “tax harmonization.”

What’s particularly troubling is that U.S. taxpayers are footing the bill for much of this nonsense. We don’t belong to the European Union, but we pay 25 percent of the costs at the U.N. and the OECD.

Fortunately, some members of Congress are trying to address this. For example, Rep. John Sweeney, R-N.Y., has introduced legislation that would end U.S. funding of these bureaucracies if they insist on pursuing policies that undermine America. Bureaucrats at the U.N. and OECD don’t want to risk their bloated budgets and tax-free salaries, so this is a good approach.

The United States is today and has always been the largest financial contributor to the United Nations System. The U.S. contributed a total of $2.4 billion to the United Nation programs and budget in 1999. This includes contributions to the UN regular budget, the regular budgets of the specialized agencies, peacekeeping efforts, and a wide variety of special programs and emergency relief operations.

Member states contribute to the United Nations in two basic ways: through assessed contributions to the UN regular budget and to the regular budgets of the United Nations specialized agencies, and through voluntary contributions to special United Nations programs.

Contributions to the Regular United Nations Budget
The contributions of member states to the regular United Nations budget are set under the United Nations scales of assessments. The scale is based broadly on "capacity to pay" as measured by Member States' shares of the world Gross National Product (GNP) and other factors. It includes discounts for countries with low per capita income (PCI).

For the period 1998 through 2000, the United States has been assessed 25 percent of the regular UN budget (which totals $2.536 billion for 2000-2001). This covers the overall Secretariat and Headquarters costs as well as programs established by the UN General Assembly. For many years, the United States has been advocating comprehensive reforms to bring the scale of assessment up to date and create a broader and more equitable distribution of the responsibility for UN financing. Any change to the scale of assessments needs to be approved by the United Nations General Assembly.

Contributions to Peacekeeping Operations
In 2000, the United Nations was funding 15 peacekeeping operations around the world with over 19,000 troops in the field. With major peacekeeping operations (PKOs) around the world, from Kosovo and East Timor to the Democratic Republic of the Congo and Sierra Leone, the United States expects that the UN budget will double to nearly $3 billion in 2001.

Member states are assessed separately for each peacekeeping operation.

For Calendar Year 2000, peacekeeping is funded by an ad hoc system of apportionment that is based on the regular budget rates, but provides substantial discounts to most countries. The assessment rates of the Permanent Members of the UN Security Council are increased to accommodate these discounts. Today 98 percent of costs are assessed to just 30 UN member states. The top five contributors pay more than 75 percent of expenses.

The UN assesses the U.S. at 30.3 percent for peacekeeping operations, but, in accordance with U.S. law that went into effect in Fiscal Year 1996, the U.S. can pay no more than 25 percent. In 1999, the U.S. contributed $216 million for United Nations peacekeeping operations around the world.

Budgets of Other Agencies
The United States is generally assessed at the same rate as the regular UN budget (currently 25 percent) for the budgets of many UN specialized agencies such as the World Health Organization (WHO), World Meteorological Organization (WMO) and International Labor Organization (ILO).
U.S. contribution rates are lower in percentage terms for the International Telecommunications Union (ITU) and Universal Postal Union (UPU), since contributions to those agencies are based on a system known as "contributory units." Each country chooses the number of units of the budget that it wants to contribute. The U.S. usually chooses to pay at the highest allowable category of contributory units, or chooses to match the highest category chosen by any other country.

Percentage contributions by governments to the budget of the World Intellectual Property Organization (WIPO) are smaller than for other international organizations, as more than half of WIPO's funding is generated by user fees paid by the private sector.

The U.S. is also the largest contributor to the World Trade Organization, whose scale of assessment is based on national shares of average world trade.

In addition to assessed contributions to the regular budgets of the Geneva-based agencies, the U.S. also makes substantial voluntary contributions to international organizations. This is especially the case for humanitarian agencies such as the Office of the United Nations High Commissioner for Refugees (UNHCR), International Committee of the Red Cross (ICRC), and International Organization for Migration (IOM).

Budgetary Reform
In November 1999, Congress passed legislation (Helms-Biden) providing for payment of $926 million in arrears in three tranches, subject to the fulfillment of specific conditions in each of those years.

The tranche amounts and the certifications are as follows. Tranche One: Amount: $100 million was paid to the United Nations in December 1999. Certifications: the UN has no standing army; the UN and certain UN system organizations met the following provisions: they have taken no action causing the U.S. to violate its Constitution or laws; do not have external authority to borrow money; do not challenge U.S. sovereignty; do not tax U.S. citizens; do not charge interest on arrears; and do not infringe on U.S. property rights.

Tranche Two: Amount: $475 million to be paid to the United Nations, plus an additional $107 million UN peacekeeping reimbursement credit. Certifications: assessment rate ceiling for UN regular budget reduced to 22 percent; assessment rate ceiling for UN peacekeeping established at 25 percent; action on contested arrears.

Tranche Three: Amount: $244 million ($30 million for the UN and $214 million to other international organizations). Certifications: no-growth budgets in FAO, ILO, WHO for the 2000-2001 biennium; ; assessment rate ceilings in FAO, ILO, WHO reduced to 22 percent; U.S. seat on the UN budget committee (ACABQ); evaluation criteria and "sunset" policy for UN, FAO, ILO and WHO programs; criteria for inspectors general established in the FAO, ILO, and WHO; new budget procedures in the UN, FAO, ILO, and WHO; U.S. General Accounting Office (GAO) access to UN financial data; changes in the UN's personnel system; assessment rate ceiling for the UN regular budget reduced to 20 percent (a waiver was included in the legislation for this final element).

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