The power of the flat tax, Bulgarian style
July 22nd, 2008 by Thomas KeeleyStephen Moore has a great piece on WSJ.com illustrating the success that Bulgaria has had since implementing the flat tax. More specifically, he discussed the benefits it has reaped by implementing an “across the board” 10% flat rate earlier this year.
Here is an overview of some of the successes Bulgaria has seen since implementing a flat tax:
- Bulgaria went from having an unemployment rate of 12% to 6%
- In the first six months of 2008, Bulgaria experienced record GDP growth (7%)
- Inflation is projected to drop from 14% to 9% by the end of 2008
- In May, Bulgaria was accepted into the “Reformers Club of the World Bank,” a group which honors countries that have made considerable changes to promote business growth.
This positive impact of the flat tax in Bulgaria isn’t something that is only being seen on paper, but is being felt in the homes of many Bulgarians. An example of this can be seen in things like automobile sales, where year after year, Bulgaria ranked second in the European Union for most growth (20.5%). The country with the highest growth was Lithuania (36.2%), and third was Slovakia (19.3%).
What is one correlation between the three countries? They each have some form of a flat tax.
Of course, the question that I’m sure many have is whether or not the flat tax is something that the United States should consider implementing. There are some who will argue that examples like Bulgaria, Estonia, etc, shouldn’t be used simply because they are post-war countries with smaller economies, thus making it a weak argument for implementation here in the United States. To no surprise, it is often that those very naysayers are the ones who are promoting other policies like the fair tax.
While the HR 25/S 105 (Fair Tax) crowd has definitely built a strong base of supporters, there is one thing that a flat tax has that the Fair Tax simply cannot match, a track record of success. There are over twenty countries that have implemented a flat tax and seen success, and that number will only continue to rise.
July 22nd, 2008 at 6:06 pm
“Bulgaria went from having an unemployment rate of 12% to 6%
In the first six months of 2008, Bulgaria experienced record GDP growth (7%)
Inflation is projected to drop from 14% to 9% by the end of 2008″
Well, congrats to Bulgaria! Our highest historical unemployement rate that I could find in the USA was 9.71% back in 1982, and it’s currently around 5.5% now. The USA’s record GDP growth that I could find was 7.188% back in 1984. The max U.S. inflation rate that I could find was 23.67% way back in 1920, and right now it’s about 5.02%. Let us know when the Bulgarians are on the same playing field that we are. Since when do we need a massive amount of more cars in the USA?? I would think that automobile sales would be up in eastern Europe but were they that high to begin with??
“What is one correlation between the three countries?”
There are probably many that you would *never* list here.
September 28th, 2008 at 7:34 pm
United state Congress should pass the fair tax bill,effective immediately.
September 29th, 2008 at 6:21 am
“To no surprise, it is often that those very naysayers are the ones who are promoting other policies like the fair tax.”
That’s because the fair tax is a consumption tax- the direct opposite of the flat tax which is an income tax. The power to tax income is absolute. And absolute power corrupts absolutely.
“In May, Bulgaria was accepted into the “Reformers Club of the World Bank,” a group which honors countries that have made considerable changes to promote business growth.”
That’s no surprise. Income tax systems provide unchecked governments with guaranteed revenue streams which they use as collateral to borrow unlimited funds from national banks.
Governments that tax the incomes are “unchecked” because income taxes leave people with no means of keeping their governments in check. The people are nothing but slaves to their governments under income taxes, just like I am here in America. Government leaders spare no expense in supporting big businesses in order to keep us all employed rather than self employed. They will claim that they are only trying to help people by preserving jobs but, the simple truth is that it’s easier to garnish taxes from hundreds of millions of wages than it is to haggle with hundreds of millions of financially independent business owners. Especially when they don’t approve of their leader’s objectives. This 700 billion dollar bail out of the loan industry is proof of that. We might as well be marched to work in chain gangs lead by federal police every morning.
November 19th, 2008 at 4:50 pm
Bulgaria is a fast growing country at the moment but word financial crisi can be a catastrophic if the governament do not take a proper steps. At the moment there is a big savings in the country budget and it can be used for saving big companies from bankrupt.