17/02/2005 2:02:36 pm
When Will Flat Tax Come to Sweden? Several speakers here in Brussels have focused on the fantastic market-oriented reforms in Central and Eastern Europe. Some have focused extra on the principle of flat tax. That is, every individual and company pays the same percentage in tax. That still means that the one who earns more pays more. If you earn twice as much, you pay twice as much. But you are not punished by even higher taxes than that - as is the case in Sweden and the rest of Western Europe. Flat tax systems were first introduced in Estonia in 1994. Now, many have followed:

Estonia 26 %
Lithuania 33 %
Latvia 25 %
Russia 13 %
Serbia 14 %
Ukraine 13 %
Slovenia 19 %
Georgia 12 %
Romania 16 %

With a flat tax rate you get a very transparent system. (Someone said that your income declaration could be done on a postcard.) You also have a system where more work is never punished. And what′s more - government gets ever higher revenues. Growth in these countries is so high that government gets more money every year despite these low taxes. And in Sweden the government just proposed raising the highest tax pressure in the world. Will they never learn?