Free enterprise at the World Bank
December 19, 2006| By Nathaniel Ward
International organizations are typically rather one-sided in their policy prescriptions: raise taxes, increase spending, increase regulation, and so on. Heritage tax expert Dan Mitchell notes some of the worst offenders:
The International Monetary Fund recently published a sloppy—and quickly discredited—paper attacking the flat tax. The Organization for Economic Cooperation and Development may be even worse. This Paris-based bureaucracy actually has an anti-tax competition project that tries to penalize nations with low tax rates. The United Nations, meanwhile, has a crazy idea for global taxes.
But there’s one organization that may have seen the wisdom of free enterprise. Mitchell explains that a new report from the World Bank endorses free-enterprise tax policies. He summarizes the report’s findings in an article on FoxNews.com:
- High tax rates and complicated tax regimes hurt growth.
- High tax rates and complicated tax regimes encourage tax evasion.
- High tax rates can reduce tax revenue.
- Low-tax systems reduce corruption.
“For all intents and purposes, the World Bank has broken ranks with the other international organizations and decided to accept real-world evidence about the benefits of low tax rates and fundamental tax reform,” Mitchell writes. “It even endorsed Laffer Curve analysis because of the overwhelming evidence that low tax rates result in more taxable income.” Good for the World Bank.
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
