U.S. ratification of UNCLOS would give United Nations ability to impose tax on U.S. citizens
UNCLOS uniquely gives the United Nations the ability to impose a tax on nations by use of its royalties assessments on the exploitation of oil and gas reserves.
As stated earlier, of the many precedents embodied in the existence of the ISA, the creation of an international bureaucracy with powers to tax, regulate, and enforce its will are perhaps the most dramatic and, in the long term, the most dangerous. The granting of what are essentially sovereign powers is unprecedented and unfortunately fits within a larger pattern of UN behavior-that being, to free itself from the political domination of the five permanent members of the Security Council as well as to insulate itself from the uncertainties and political limitations accompanying the traditional state-sponsored financing of UN operations.
Secretary General Boutros-Boutros Ghali recently proposed to establish a "world tax" on airline tickets and currency exchanges as an independent means of financing the UN. "Faced with $2.3 billion in arrears from member nations that failed to pay their assessments -- including $1.2 billion owed by the United States -- UN officials and others have long sought an independent means to raise money for the organization's annual budget of roughly $3 billion" (Barber 1996). Disclosure of this plan provoked an immediate negative response in the U.S. Senate when majority leader Bob Dole stated that, "the United Nations continues its out-of-control pursuit of power" and along with colleagues called for an immediate investigation (Barber 1996).
Unfortunately, the Law of the Sea Treaty goes far beyond the Ghali plan and may indeed be viewed as a harbinger of future UN efforts to spin-off or reformulate its activities in such a way as to insulate itself from, and possibly become ascendant to, the sovereign character of nation-states. Unless the United States is willing to insist on further renegotiation of the treaty to protect these and other vital interests, the Senate will have little alternative other than rejection and refusal to ratify. Rejection by the Senate appears to be the only action capable of serving as the catalyst to bring all parties back to the table.
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Problem #3: A step in the direction of international taxing authority. The Convention contains an ill-advised revenue-sharing provision that is applied to income derived from oil and gas production outside the EEZ. The general bias in the Convention, as I indicated earlier, is in favor of the redistribution of seabed resources. This bias is codified in the area of oil and gas revenues. The U.S. will be forced to pay a contribution to the International Sea-Bed Authority created by the treaty based on a percentage of its production in the applicable area beyond the 200-mile limit.
While he asserted the argument against this revenue-sharing provision was unconvincing, State Department Legal Advisor William H. Taft IV acknowledged it was an argument that could be made in the course of October 21, 2003 testimony before the Senate Foreign Relations Committee. Mr. Taft understates the problem. By any reasonable definition, this provision would for the first time allow a U.N.-affiliated international authority to impose a tax directly on the U.S. for economic activity. At least, I am unaware of any precedent for this kind of international taxing authority.
Shoring up the state system, as recommended by former Secretary of State Shultz, means that international institutions should be funded by the voluntary contributions of their member states. The extent to which these international institutions are allowed access to independent streams of revenue is the extent to which they will seek to obtain governing authority at the expense of the state system. While the revenue-sharing provision related to oil and gas production in the Convention is a relatively modest step in this direction, it is still a step in the wrong direction.
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How about taxing authority? This will be the first time that an international organization has explicitly been given the ability to raise revenues." Now John Moore will quibble, I suspect based on past experience with him, that this is not really a tax. These are fees; these are tithings of some kind, permitting obligations.'" Whatever its name; we would begiving to a U.N. organization the ability to raise its own revenues. And this is going to have precedential implications, especially at a moment when the U.N. is angling to try to find other ways to raise revenues, starting with airline taxes that are already being imposed by some in order to pay for unobjectionable things like AIDS and tuberculosis and other medical treatments through U.N. facilities." That is something conservatives should be concerned about, especially since it ensures that the U.N. will be even less accountable than it is today when it relies on us for a quarter of its funding.