International Tax Revolutions
By Rob on Domestic Issues
Say Anything
Why America needs tax reform:
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A flat tax regime has been adopted in 11 countries and counting. As each citadel falls, another is forced to respond to the new-found vigour of its neighbour. Next up is Greece, where the prime minister could announce one in a few weeks’ time. Greece has unbelievably rickety public finances and the hope is that a flat tax rate of 25 per cent will revive the moribund economy, reduce evasion, attract high earners and send revenues pouring into the coffers of Athens.
But a far bigger prize for the flat-tax revolution is to come. Over in Germany, Angela Merkel, the daughter of a Lutheran pastor who, through some quirk of fate, was brought up on the wrong side of the Berlin Wall, is challenging Gerhard Schröder for the chancellorship. Judging by the polls, she is likely to win on September 18: her rating soared after she appointed a slightly eccentric professor called Paul Kirchhof as her economic adviser.
In fact, Merkel is so far ahead that the stock market has leapt, too. Germany, investors believe, is at last on the threshold of economic recovery.
“With her surprise move to name Germany’s flat-tax guru, Professor Kirchhof, as her preferred choice for finance minister, Merkel has regained the political initiative and stirred up a healthy debate about tax reform,” writes Lorenzo Codogna, Bank of America’s European economist, in a note to clients.
“If Germany turned itself into the first major Western country to adopt a flat tax, it would probably become a much more attractive place for business investment in general.”
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Our present tax system is an inefficient burden upon business and individuals alike. As more and more countries go to simpler, less-punishing tax systems America will be left behind. International business interests will choose these countries over ours to escape the brutal rates, confusing regulation and inane bureaucracy that comes with our income tax.
That means fewer jobs for Americans and a marked decrease in American global power.
What America needs is a tax system that will put us ahead of the game. We need a system that will increase federal tax receipts while lowering the tax burden (and regulatory confusion) that Americans and businesses are faced with.
We need a FairTax.
fairtax.org
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