It's time to drive home the lesson of Russia's 13% flat tax - the lowest in Europe. It's amazing what it did to the Russian economy. It blows all the arguments against tax cuts out of the water, as did the 18-year economic boom given to us by Ronald Reagan in the 1980's.
Everyone knows this, but liberal Democrats go out of their way to rewrite history so as to avoid this truth. Still, if you get hold of an honest economist, and present them with the Laffer curve it's not even arguable that tax cuts increase revenue and growth. That dotted line is the perfect tax rate, and we're not at that rate now.
It's an undeniable theory that, up to a point, the lower tax rates are, the more economic activity will take place. If you don't believe it in taxes, look at it in the sale of tangible consumer goods. When they put something on sale, people buy more of it. The only time this theory isn't employed is when governments are involved, such as with public transportation.
When they start losing money, they raise fares and don't increase business. Eventually, you have one passenger a day paying $100,000 for a subway token. More Russians are paying income tax, thanks to Vladimir Putin taking a page out of the Steve Forbes economic textbook. Personal income tax revenues rose nearly 47% in 2001. At the same time, tax revenues rose 50% overall. Early results from 2002 look even better.
Russia's deputy head of the tax ministry's individual income tax department expects the number of people filling out income tax forms to "increase substantially" in 2002. This is part of the dirty little secret. Lower rates don't just create more revenue. They create more taxpayers. It pulls people out of black market economies, and businesses expand by hiring more people on the books - again, more taxpayers result.
More taxpayers, each paying less individually than they had, still equals greater take for the treasury. We see that this 13% flat tax in the former communist country is causing the economic revival we've sought ever since the fall of the Berlin Wall. They've tried everything under the sun, but nothing worked until this, full-fledged, unbridled capitalism - the Laffer curve, supply side economics, Reaganomics, "voodoo" economics - that the Democrats were criticizing all weekend long in Florida.
It single-handedly revived the Russian economy. If anybody wants to maintain that lowering tax rates does not increase revenue, they have their heads in the sand. Clearly if your goal is to increase revenue, and to be "fair," you want to cut taxes. So I have to ask: What is the purpose of taxes, you liberal Democrats? Their answer is to punish achievement and redistribute wealth, to control people and gain power. |
