Let taxpayers in high-tax nations subsidize the OECD.
In their Wall Street Journal op-ed about DOGE, Elon Musk and Vivek Ramaswamy said they would cut “$1.5 billion for grants to international organizations.” You will find that number here — the table is on page 73. While you’re at it, scroll through the list of all the stuff your tax dollars fund abroad. It will make your head spin.
I want to make sure they don’t forget that promise.
Today, I focus on one of these orgs. The Paris-based bureaucracy called the Organization for Economic Cooperation and Development (OECD).
I’m not sure that most people realize how much we spend on an organization that has, for the last 30 years, joined the dark side of the force. It spends considerable effort calling for higher taxes and bigger government around the globe. The irony of all ironies is that while promoting higher taxes for everyone else, OECD bureaucrats enjoy their salaries tax-free.
The OECD operates on a budget that’s divided into two main parts. The U.S. contribution to the OECD in 2024 was $74.1 million and will go up to $85 million in 2025. Part I funds activities of interest to all member countries and is financed through assessed contributions. The U.S. pays the single largest share by far — 18.3 percent — of that Part I budget’s total size of $250 million in 2024. That’s a contribution of about $45 million. Then there’s Part II. It supports programs by the countries that choose to participate in these programs based on agreed-upon scales or arrangements. The U.S. contributes about $30 million to that budget.
Congress should end all our contributions to the OECD. In theory, the OECD is a place “where the governments of 34 democracies with market economies work with each other, as well as with more than 70 non-member economies to promote economic growth, prosperity, and sustainable development.”
And the OECD used to do that. In a letter to Senators Susan Collins and Patty Murray making the case for defunding the OECD earlier this year, a few senators reminded us that the organization used to be okay:
In 1963, the OECD published a draft model tax treaty, which includes “recommendations which it suggests should be made to Member countries in order that the Draft Convention may be the medium through which a substantial advance can be made forthwith towards . . . the abolition of double taxation.” As recently as 2010, the OECD published a paper entitled “Growth-oriented Tax Policy Reform Recommendations”, stating that “corporate income taxes are the most harmful for growth as they discourage the activities of firms that are most important for growth: investment in capital and productivity improvements” and recommending that “lowering statutory corporate tax rates can lead to particularly large productivity gains in firms that are dynamic and profitable.”
Not anymore. For one thing, every bad big government policy idea you can think of, from support for Obamacare to support for large stimulus or the adoption of a value-added tax for America, the OECD bureaucrats suport!
But adding insult to injury, the organization has for several decades led a campaign for tax harmonization and a global tax cartel. Read this excellent article by Professor Andrew Morris on this issue. Starting in the 1990s, the OECD designated 41 nonmember countries and territories as “tax havens” that are supposedly guilty of unfair tax competition simply for having lower tax rates and a healthy commitment to financial privacy (though all these countries collaborate with law enforcement when presented with a warrant). These countries were asked to promptly discontinue their “unfair practices” unless they wanted to face financial protectionism imposed by OECD member countries. The whole point of the initiative was to shelter high-tax nations like France from bleeding capital to lower-tax jurisdictions.
Once they were done bullying lower-tax nations, OECD sages moved on to bigger goals. Helped by the European Union and the United Nations (we contributed $707 million to the U.N. regular budget in 2024 and millions more to U.N. affiliates; see page 75), the OECD bureaucrats started clamoring for the creation of something akin to an international tax organization, global taxes, and more explicit forms of tax harmonization.
Forgetting their own research about the corporate income tax being the more distortive way to raise revenue, and using the Part II funds we give them, the OECD bureaucrats started to push for a global tax system for corporations. The Biden administration, especially Treasury secretary Janet Yellen, have been eager collaborators in this effort. It’s not surprising considering that a big budget priority for Democrats has been to raise the corporate income tax rate.
Adam Michel at the Cato Institute describes the project this way:
This sprawling effort comprises two pillars, which, taken together, threaten higher and more complicated taxes. Pillar One redistributes hundreds of billions of multinational corporate profits to countries based on customer location, regardless of a company’s physical location — upending critical protections against extraterritorial taxation. Pillar Two consists of a series of new complicated rules that enforce a global minimum tax of 15 percent and undermine the economic success of the 2017 Trump tax cuts.
Pillar Two also includes a serious and dangerous exchange of taxpayers’ information (including with unscrupulous governments). Also, read that entire letter to Senators Collins and Murray I mentioned earlier. Senator Grassley and others make a strong case about why Pillar Two is awful and against U.S. interests and why the OECD can’t be trusted.
Now that the Biden administration is on its way out, and since President Trump has repeatedly said he wants to lower the corporate income tax rate to 15 percent, the OECD must be stopped from using our tax dollars to advance its tax-harmonization and global tax schemes to raise taxes. That starts by zeroing out this line in our budget — no more contribution to OECD Part I and II.
Let taxpayers in high-tax nations subsidize the OECD.