08/09/2005 10:57:51 pm
The Flat Tax Success - More Evidence. The British think-tank Reform have published a thorough Bulletin with new facts about experiences from flat tax reforms and decreasing tax levels:

Eastern European countries with a flat tax have grown twice as fast as countries without. They have had an average annual GDP growth of 5.3 per cent, compared with only 2.6 per cent among those without.

In Russia, personal income tax revenues increased by 25.2 per cent in real terms for the fiscal year after introducing its flat rate in 2001, by 24.6 per cent in 2002, by 15.2 per cent in 2003 and by 14.4 per cent in 2004.

President Kennedy cut the top rate of tax from 91 per cent in 1963 to 70 per cent in 1965. Tax revenues increased by 62 per cent between 1961 to 1968. President Reagan further cut the top rate, from 70 per cent in 1980 to 28 per cent in 1988. Tax revenues increased by 99.4 per cent between 1980 and 1990.

Foreign direct investment has more than quadrupled in Estonia since introducing a flat tax, from an inflow of $202 million in 1995 to $926 million in 2004.

The success of the east European economies is driving the debate in the west. Flat taxes are under discussion in Germany, Spain, Italy and Greece as well as the UK.

Read the entire Bulletin here - >