For years, the Federal Council of Switzerland has said that the G-20, the body of heads of state of 20 big economies, and the OECD are all about more transparency in tax matters and preventing harmful practices in corporate taxation. Switzerland had to join in, so it was said, so as not to end up on a “gray” or even “black” list. Just over two weeks ago, many voters approved the abolition of cantonal tax privileges for this reason.
Now the mask has fallen. Under the pretext of taxing the big Internet companies, a working group of the OECD on behalf of the G-20 and circumventing the elected parliamentarians of the member countries to a completely new company taxation. Companies should also pay taxes where they sell their products. And a minimum tax rate should prevent this from being circumvented. The proposal enjoys the support of numerous large countries such as Germany, France and the USA.
The proposal aims for the dynamics of an open society
The competition for a good framework for the economy, including low corporate taxes, will not be abolished, but it will be useless. However, if countries no longer have to take good care of the environment, because they are all equally bad, then they will increase taxes together. In the future, a decision by the G-20 or the Council of Ministers of the OECD will suffice. You do not have to be a clairvoyant to predict that.
This has consequences, because wages, wealth, infrastructure and social security in Western countries are based on economic growth. Less growth means lower wages. The state can only spend what was first earned in a free economy with innovative products. Poor conditions and high taxes prevent growth, as even the OECD admits in its papers. And the high corporate taxes are ultimately always paid by the general public, especially by the employees of the companies. The OECD proposal aims at the inventiveness and entrepreneurship of free people, at the dynamics of an open society.
Nobody fights back
The OECD was founded in Paris in 1948 to accompany the implementation of the Marshall Plan for the reconstruction of devastated Europe. It was once a platform for sharing good economic policy for the common good. This has become today a power cartel of the politicians of the great powers. These are always treated gently, if they just do not want to participate.
By the way, the G-20 and the OECD are unleashing democratic processes. The decisions of global political elites must be implemented, otherwise threaten “black lists”. They behave as a world government – but without democratic mission and legitimacy. They are in fact right, without being accountable to the public and without being able to be voted out. In this democratic deficit lies the breeding ground for the populist resistance to international cooperation. Each country can veto decisions taken by the OECD. What must happen before Switzerland, together with other countries, works to secure an open and democratic society?
Published at Tamedia on june 6th, 2019: https://www.tagesanzeiger.ch/wirtschaft/standardkartell-der-politiker/story/24411947
Picture: https://flic.kr/p/T7TLyS by OECD Organisation for Economic Co-operation and Development (CC-License: https://creativecommons.org/licenses/by-nc/2.0/)