Flat Tax Fever

I posted about Slovakia's Flat Tax and private pension system. John Fund at OpinionJournal documents its success in the former Soviet Union as Estonia, Romania, Georgia, Russia, Serbia, Ukraine have all implemented flat rates.

Despite all of its advantages, the flat tax faces enormous ideological opposition. Envy and the lust for the political control that complicated tax regimes can provide are powerful motivations to keep progressive tax systems in place. Karl Marx in "The Communist Manifesto" was among the first to call for "a heavy progressive or graduated income tax" at a time when a flat rate was the norm in advanced countries. He listed it as second in the list of priorities for a new society based on the class struggle.

It is therefore ironic that every country that has adopted the flat tax is a former communist nation--except Hong Kong, the modern originator of the concept, which has seen its new communist rulers retain the flat tax as a centerpiece of its economic policies.

Given all this, why should the U.S. allow itself to continue to see its economic potential limited by a Marxist concept that most nations that followed that path are now fleeing from?

Economics and Markets Posted by jk at February 28, 2005 2:05 PM