The speaker for the Seventeenth Acton Institute Annual Dinner is former Estonian Prime Minister, Dr. Mart Laar. One of the economic reforms Laar implemented in Estonia was a flat tax. After what was described as a brilliant economic turnaround, other countries have followed Estonia’s lead on flat tax policies and free market policies in general. Russia, Ukraine, Latvia, Lithuania, Slovakia, Romania, and Macedonia also have flat taxes for income.
The country of Bulgaria is now introducing a flat tax rate of 10 percent. This rate will be a dramatic drop from their current rate of taxing income which ranges between 20-24 percent. Bulgaria will certainly see a spike in economic growth and foreign investment.
If you value a level of fairness and simplification when it comes to income taxes you will surely appreciate a flat tax with low marginal rates. In fact, most anything would be better than the current outdated federal income tax ogre, which discourages saving, investing, and greater freedom from federal bureaucratic control.
Lawmakers in Western Europe and the United States have largely ignored the benefits of flat taxes that have benefited Eastern European nations. They would rather entrench themselves in the power the current tax code provides them. It is there they can continue to micromanage a tax-and-spend economy, along with the lives of their citizens, while continuing the politics of class warfare.
One of the most important moral components for tax law should be property rights, meaning freedom for the individual to keep more of his or her income and capital. In addition, people of faith understand the need of helping those most who need our financial, spiritual, and physical help. The freedom to develop the best use of our income and capital is increasingly becoming a historic ideal. It was John Wesley, the founder of Methodism, who said “Make all you can, save all you can, and give all you can.”
Remember also, massive and out of control federal spending is the root of much of the tax problem in this country.
I remember a few years back Steve Forbes saying on the presidential campaign trail, “Some people in Washington say we can’t afford the tax cut [that comes from a flat tax], well maybe we can no longer afford the politicians.”