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| Europe |
| Eastern Europeans put their faith in the flat tax |
| 2005-02-15 |
| Romania's new prime minister knows his priorities. His country may be struggling with a massive budget deficit, but Calin Popescu Tariceanu isn't asking for painful sacrifices: he's cutting taxes. Within 48 hours of taking office, his government issued an emergency edict to take effect in time for the New Year. From last month, companies and private citizens pay tax at a single rate of just 16 percent. Cue the rejoicing among the country's top earners, previously charged at more than twice as much. A costly bid for popularity—or the new orthodoxy? Once upon a time, the "flat tax" was just a pet cause of free-market ideologues, spurned by practical politicians. No longer. Romania joins a lengthening list of converts among the post-Communist states of Eastern Europe. Estonia began the trend back in 1994, to be followed by Latvia, Lithuania, Ukraine, Russia and Serbia. Last year Slovakia fixed a universal rate of 19 percent. Opposition parties are pressing for similar deals in Poland and the Czech Republic. Even fiscally orthodox Old Europe is taking note. "There is discussion all over the EU," says Katinka Barysch, of the Centre for European Reform in London. "People are asking, if the Slovaks can have such a beautiful and simple system then why can't we?"... No mention of the Paul Bremer flat tax in Iraq. |
| Posted by:Anonymoose |
| #1 It will be interesting and very worthwhile in watching and recording the experiences with the flat tax. The rest of the EU could have a flat tax, but watch out, it will probably head for 100% if nobody is watching. Thinking about it, that could happen to the US, too, if we aren't vigilant. Heh. |
| Posted by: Alaska Paul 2005-02-15 10:01:49 PM |