Taxpayer's Tab: A $68 Billion Hit to Your Wallet

NTUF Analysis of OECD Recommendations for the American Economy
Vol. 5 Issue 42, November 20, 2014
Study: OECD’s Proposals Would Cost American Taxpayers Billions

Yesterday, National Taxpayers Union Foundation (NTUF) released a new study that calculated the Organization for Economic Cooperation and Development’s (OECD's) recent recommendations for U.S. policymakers would cost American taxpayers over $68 billion in new annual spending.
The OECD is a multi-national, membership-based partnership based in Paris, France. It is dedicated to studying and advocating for "policies that will improve the economic and social well-being of people around the world."
In OECD’s 2014 Economic Survey of the United States, the multi-national partnership advised legislative reforms that included a simpler Tax Code and lower corporate tax rates, but also advocated costly items like expanded pre-school funding and a cap-and-trade emissions pricing system.
NTUF’s study comes at the conclusion of the G20 summit in Brisbane, Australia, where world leaders committed to a goal of adding $2 trillion to the world economy by 2018. The OECD will oversee each country’s adherence to the G20 program, which in the case of the policy wish list submitted by the White House at the summit, mirrors much of what was recommended by the OECD in its Survey.

And despite being just one of 34 member nations, the U.S. funded over 21 percent of the OECD’s 2014 budget. The $87.4 million contribution is 23 percent more than the level of funding the U.S. provided for the North Atlantic Treaty Organization.
"Americans may not always pay attention to the alphabet soup of international organizations, but they have 68 billion reasons to be aware of what the OECD is telling governments to do," said NTUF Director of Research Demian Brady and study co-author. "The U.S. needs to consider whether its significant investment in OECD is generating unique and helpful ideas, or if the organization is just pushing one-size-fits-all programs."
The highlights from NTUF’s analysis:
  • OECD offered 15 proposals that, if enacted into law, could impact federal spending. Eight were specific enough for NTUF to quantify and assign cost estimates.
  • The most expensive proposal supported by OECD was an emissions pricing initiative, which could take the form of a cap and trade system, costing taxpayers $51.5 billion per year.
  • While OECD advocated for a simpler personal income tax system and lower corporate tax rate, NTUF was unable to quantify any savings those proposals might entail.
Although the Survey does recommend some positive reforms such as tax simplification, there are also several items that should raise red flags for taxpayers, including higher spending, more regulation, new taxes, and a controversial tax administration scheme that would have the IRS send "pre-filled" returns to taxpayers.
Study co-author and NTUF Policy Analyst Michael Tasselmyer added, "All too often the OECD takes a top-down approach to policy by calling for the federal government to trump state reform efforts, as well as for global steps to stifle tax competition between nations. Yet, tax competition has demonstrably increased prosperity and economic freedom for citizens across the globe. U.S. taxpayers and policymakers alike should ask whether they are getting a good return on their $87 million investment."
Proposals in the OECD’s 2014 Economic Survey of the United States
(Dollars in Billions)
Budget CategoryAnnual Cost
Energy and the Environment $51.7
Government Reform Unknown
Health Care Unknown
Homeland Security Unknown
Grand Total$68.1
Note: A full description and cost justification for each recommendation is available in the Appendix of the study.
Source: Continental Drift: OECD’s Imported Fiscal Policies for America, National Taxpayers Union Foundation

National Taxpayers Union Foundation is a nonpartisan research and educational organization dedicated to helping Americans of all ages understand how taxes, government spending, and regulations affect them. Through our timely information, analysis, and commentary, we’re empowering citizens to engage in important policy debates and hold officials accountable.

Our findings are provided for educational purposes only and are not intended to aid or hinder the passage of legislation or as a comment on any Member’s or Candidate's fitness to serve. 
Photo Credits: Wiki Commons, Reuters