Tuesday, September 25, 2007

Flat Tax Succeeds, Media Silent

In the United States, the flat tax has long been an object of complete derision by the media and the Democratic Party. However, as the Investors' Business Daily (IBD) reported in an editorial on Spetember 24, Eastern Europe is rushing to embrace flat taxes and it has already caused massive improvements. Yet the American press has been completely silent. Accident or deisgn? I fear the latter, as it does not fit the media's preferred mold.

However, their silence is becoming increasingly unsustainable. According to the IBD,
In America, cutting tax rates is an ideological issue. In the former Soviet satellites of Europe, it is increasingly not an issue at all — so obvious is it that it gives people better lives.

It began with Estonia in 1994, when Mart Laar as prime minister, thinking he was just emulating the capitalist West, made it the world's first nation in modern times to enact a flat tax. A major fiscal crisis resulting from the collapse of the Soviet Union was soon fixed, Estonia was growing at 7% a year and the "Baltic Tiger" was born.


Nearby nations soon began getting their feet wet. First, Latvia and Lithuania, both at rates of about 25%. Then Russia in 2001 enacted a flat tax on personal income at 13%; revenues doubled there in less than three years.

Serbia followed in 2003 with a 14% flat rate. Ukraine set its flat tax at 13% in 2004.

Slovakia activated its 19% flat rate the same year. Romania's flat tax was pegged at 16% in 2005.

Georgia outdid them all, passing a 12% flat tax into law on an overwhelming parliamentary vote just before Christmas 2004. Macedonia's flat tax rate, inaugurated this year, is also 12%.

And the flat tax has improved conditions in every single state that has adopted it. Yet the media and the Democrats continue to claim that our progressive tax code is necessary. Maybe necessary to the reams of tax lawyers, IRS flunkies and people like most Congressmen who can afford to pay others to find the loopholes, but certainly not necessary to ordinary people like me. The flat tax has been proven in Eastern Europe. How much could we increase our economy if only the cowardly politicians in Washington and their socialistic flunkies in the media would actually report honestly on the European experience with the flat tax. They would prefer to sugarcoat the ravages of socialism than tell the truth about a capitalist success, it would seem.

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