FreedomTalks

The Wall Street Journal reports:

Still untested in the West, the flat tax has now become the norm in Eastern Europe.

The Czechs are the latest converts with Prime Minister Mirek Topolánek’s announcement last week that the personal income tax rate will fall to a flat 15% next year, replacing progressive rates of 12% to 32%. The corporate tax rate gradually drops to 19% in 2010 from the current 24%. If the Prime Minister manages to push his plans through a divided parliament in June, it would bring to 14 the number of single-rate tax systems in the world, all but four of them in Eastern Europe. (Hong Kong, Iceland, Mongolia and Kyrgyzstan are the exceptions.)

In deciding on a flat tax, it’s a good bet that Prague had Bratislava on its mind. The Czechs’ traditionally poorer Slovak cousins have outshined their former countrymen with the help of a flat 19% tax on corporate and personal income. The peaceful break-up of Czechoslovakia has led to some mutually beneficial competition between the two countries. It’s past time this competitive flat-tax spirit extends to the economies west of the old Iron Curtain.

This entry was posted on Tuesday, April 17th, 2007 at 9:13 am and is filed under Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.