Politics & Policy

Global Tax Rage

Anti-tax activists unite!
St. Louis               

Even as the Daschle Democrats threaten to “revisit” and thereby shrink George W. Bush’s just-signed tax cut, free marketers should take heart. The president’s critics are out of step with both U.S. tax-fighters and a growing, global anti-tax movement.

The National Taxpayers Union gathered over 200 tax-limitation activists here to share ideas and strategies from June 14-16. Surprising, however, were the 40 leaders of 20 organizations from 15 foreign countries including the Stockholm-based World Taxpayers Associations. Their enthusiasm for tax reduction should buoy those who favor limited government and unlimited growth overseas.

The news from the former Soviet Union is especially encouraging. Vladimir Pustovoitovsky is the Howard Jarvis of the Ukraine. With thick bifocals and gray hair, he resembles the legendary crusader who unleashed the modern tax-cutting movement through California’s Proposition 13 in 1978. Pustovoitovsky’s Association of Ukrainian Taxpayers includes 29 regional and 288 local branches. Some 70,000 taxpayers work for 885 AUT-associated companies. The group’s logo says it all: an ant struggling to carry a coin on its back.

AUT staffers have represented numerous taxpayers in disputes with revenue authorities. They also have arranged educational seminars, a “Tax Library” book series, and have appeared in 235 TV shows and 255 newspaper articles between 1999 and 2000 alone.

Russia itself faces countless challenges. Still, since 1991, it has ditched Marxism-Leninism and jumped to the right of Steve Forbes on taxes. Last January, Russia implemented a 13-percent flat tax, four points below Forbes’s signature proposal. Well, at least we beat them to the Moon.

Africa looks a bit brighter thanks to Otieno Igogo, founder of the Taxpayers Association of Tanzania. Launched in December 1999, TAT has a staff of four and 236 members.

“We sued the Tanzania Revenue Authority,” Igogo explains. His group fought for a man who imported a $2,500 car from Dubai. Authorities assessed the car at $7,500, then taxed him accordingly. TAT persuaded officials to follow WTO rules and henceforth base duties on transaction receipts rather than bureaucratic fiat. “It was a big loophole for corruption,” Igogo says.

He similarly convinced officials to tax new businesses on their actual revenues instead of in advance on often-inflated government estimates of potential earnings. “The law did not let them do that,” Igogo explains. He also authored a 20-percent flat tax which he says the finance minister supports, although it faces tough sledding in parliament.

Pablo Trujillo considers the Colombian Taxpayers Association a watchdog over Bogota’s public finances. With just 80 members so far, the new group has focused on research. Its study of the national comptroller’s office discovered that it spent $126 in 1999 to identify each single dollar lost to fraud or mismanagement. “They don’t know how to look,” Trujillo says, “and when they do find something, it’s too late.”

His group — which Trujillo believes is the first Spanish-language taxpayers association — also demonstrated that the poorest Colombians are further impoverished through hidden fuel and transit levies that swell the price tags on basic purchases.

“Many people think they pay nothing, and that everything they get from government is free,” Trujillo says. “But even the poor are paying 10 percent taxes. Nothing is free.”

Scandinavians are among Earth’s most beleaguered taxpayers. Denmark groans under a 63 percent top marginal tax rate that kicks in at $30,000, ensnaring 45 percent of Danish workers.

“We have some weird taxes,” complains Sune Waesel, treasurer of the 2,500-member Danish Taxpayers Association. “We have a carbon-dioxide tax on windmill energy. The carbon tax applies to any kind of energy. Windmill energy goes into a big pool and gets taxed like the rest.”

Even worse, the car-registration tax equals 180 percent of a vehicle’s sticker price plus a 25-percent value-added tax atop that higher sum.

“Every car carries an effective tax of 225 percent,” Waesel says.

“It’s an old social-democrat idea that you should tax cars and subsidize collective transportation.” Consequently, many Danes purchase cheaper, flimsier Fiats rather than pricier, safer Volvos.

Waesel’s organization uses leaflets, a quarterly magazine, and media appearances to preach the low-tax gospel. “We have turned the debate around,” he says. “The bias against lowering taxes is about to disappear.”

These anti-tax pioneers convened just steps from this city’s famous Gateway Arch commemorating America’s westward expansion. They departed in that spirit, even more energized to promote freedom and prosperity in every direction.

Deroy Murdock is a Manhattan-based Fox News contributor, a contributor to National Review Online, and a senior fellow with the London Center for Policy Research.


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