Adam Smith Institute Blog - Flat tax marches on
By Eamonn on Tax & Economy
Companies and individuals in Romania now pay a single tax rate of just 16 percent. But it's just the latest of a long list - Estonia, Latvia, Lithuania, Ukraine, Russia, Serbia, Slovakia - to adopt the Flat Tax idea. Opposition parties want the same in Poland and the Czech Republic.
msnbc.msn.com
This, says a Newsweek International article by William Underhill, is the 'new orthodoxy' on taxation. And Old Europe is worried. "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?"
The Flat Tax is simple, and there's less reason to avoid or evade it. "Set the rate low enough and it just isn't worth going criminal," says the ASI's Madsen Pirie, quoted in the piece. The Belgian entrepreneur paying 50 percent on the top slice of his income might be tempted to hide his cash offshore; not so his Slovakian equivalent.
It may take a while for Old Europe to budge. But competition from the low-tax East will see to it. When it comes to capitalism, says Underhill, New Europe may have something to teach the Old. |
