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Forum: The U.N. – An Economic Menace

Original Article
The United Nations fancies itself a vehicle that reduces global poverty and increases economic wellbeing. But, in fact, the U.N. advocates policies that will do the opposite.

U.N. reports and committees issue a steady stream of demands for tax increases. Most would fall on Americans and citizens of other very successful countries, with revenues given to the U.N. and leaders of dysfunctional and corrupt countries.

Edward Mortimer, the U.N. secretary general’s communications director, in a Feb. 16 letter in The Washington Times, disputed some of my statements about the U.N. in a Commentary section column published the preceding week.

Normally, I do not respond publicly to letters about my columns. I am making an exception because people need to be aware of the U.N.’s misrepresentation and deception.

Mr. Mortimer, in effect, made the ridiculous argument that the U.N. did a fine job of administering the Oil-For-Food program. We can wait for the final reports of the Volcker inquiry, and the U.S. House of Representative investigation under California Rep. Dana Rohrabacher, and the U.S. Senate investigation under Minnesota Sen. Norm Coleman to see if my charges of mismanagement and corruption are correct.

Meanwhile, we already have Mr. Coleman’s statement (based on evidence his committee obtained): “The gross mismanagement of almost every aspect of the Oil-for-Food program was simply inexcusable and wasted over $690 million. Every organization has its shortcomings, but I cannot recall any organization where the scope of its problems encompassed every basic management skill needed to ensure an effective program.”

Mr. Mortimer also claimed I was incorrect in saying, “The U.N. keeps pushing for the right to directly tax the world’s citizens and business firms, and has proposals for doing so.”

One merely need go to the U.N. Web site and start reading the various reports and recommendations from its committees to see that Mr. Mortimer is either unaware of what his own organization is doing or is in denial. The only reason these global tax proposals have not been adopted is the stalwart opposition of the Bush administration.

Among the global levies proposed are a tax on international financial transactions, a tax on arms sales, a tax on airline travel, and a tax on CO2 emissions, among others. French President Jacques Chirac disclosed the real agenda when he was asked about opposition to proposed U.N. taxation of financial transactions, etc. He replied no country (i.e., the U.S.) could oppose “a position that had already been approved by 110 countries and would undoubtedly be supported by 150 overall.” Mr. Mortimer can find this statement and the tax proposals in a Sept. 9, 2004, U.N. press release concerning a declaration U.N. Secretary-General Kofi Annan had signed.

Back in June 2001, Mr. Annan provided, with his blessing, the report of the High Level Panel on Financing for Development to the General Assembly. This report called for almost unlimited tax information sharing among U.N. members (even to the most despotic of regimes) and proposed a number of global taxes, including a tax of emigrants (emigration is a fundamental human right – even by U.N. definitions). On July 20, 2004, Ambassador Sichan Siv, U.S. representative to the U.N. Economic and Social Council, commented on a U.N. report:

“We have fundamental concerns with the practicality of global taxation. We do not see how a global tax could be designed and administered in a way that is democratically accountable to the citizens of our countries. Any tax on international economic activity is likely to reduce flows of trade and investment. This is obviously not good for development.”

Subsequently, on Sept. 20, 2004, in reference to another U.N. report, former U.S. Secretary of Agriculture Ann Veneman said: “The report should have given more attention to practical steps to sustain growth. There is too much emphasis on schemes, such as global taxes, to raise external resources. Global taxes are inherently undemocratic; implementation is impossible.”

The U.N. has also called upon the U.S. to increase its development aid manyfold, yet has failed to recognize this money does not come from the tooth fairy but from very hard-working U.S. taxpayers.

The economic evidence is overwhelming that almost all the world’s countries already tax their citizens well above the welfare-maximizing rates. Thus the U.N. should call for lower taxes to maximize world economic growth.

Increasing development aid will not improve the plight of the world’s poor until the rule of law is enshrined, property rights are protected, markets are freed, and tax and regulatory barriers to economic opportunity are removed. Given these reforms, development aid will not be necessary because private capital markets will provide the needed funds.

The U.N. proposal to increase taxes on the citizens of successful countries and transfer the money to U.N. bureaucrats and corrupt and incompetent government officials is a formula for global economic destruction and enslavement. To preserve global economic liberty and progress, the U.N. budget must be reduced to stop it from promulgating these destructive schemes.

RICHARD W. RAHN
Senior Fellow, The Discovery Institute.
Adjunct Scholar, The Cato Institute.

Richard Rahn

Richard W. Rahn is an economist, syndicated columnist, and entrepreneur. He was a senior fellow of the Discovery Institute. Currently, he is Chairman of Improbable Success Productions and the Institute for Global Economic Growth. He was the Vice President and Chief Economist of the United States Chamber of Commerce during the Reagan Administration and remains a staunch advocate of supply-side economics, small government, and classical liberalism.