Republican President candidates have started their tax debate well. It has been sad, that Bush administration failed so badly in their tax reform approach. Praising abroad radical tax reforms as introduction of flat tax in Estonia or Slovakia, President Bush failed to do the same at home. It is now unfortunately harder than some years ago as the Republican majority in Congress is lost. In this context it is specially good that at least the Republican candidates have made proposals on radical tax reform, promising not only to cut taxes but to simplify the tax system. When in former campaigns Steve Forbes has been lonely voice campaigning for flat tax, then now sales tax or some sort of flat tax looks to become more main stream topic. It is however necessary to be more precise on these plans. As in other countries, these plans will be furiously attacked from other side. Republicans must have clear understandings, what they are planning to do and party must have clear and common position on this subject. Otherwise the campaign for tax reform can backfire on the same way how it happened in last German elections.
WHO IS AFRAID OF FLAT TAX?
I have never understood why the free World is still so much following the ideas of Karl Marx, which means that there are surprisingly lot of remnants of Marxism in the Western realities. One of them is progressive taxation. In their “Communist Manifesto”, first published in 1848, Karl Marx and Friedrich Engels demanded “a heavy progressive or graduated income tax”. For the founders of Marxism progressive taxation was so important that in their demands it was listed as second in importance only after the “abolition of property in land”. When the destructive nature of the first demands is largely recognized, then the nest main pillar of Marxist thinking is used in most Western countries. In long run the results of this can be very destructive too. Taking from human being one of the most valuable abilities: to make its own decisions, use its talents, to be creative and innovative, their human dignity is strongly endangered.
In 1994 I introduced flat rate tax in Estonia, finishing so at least in this area with communist thinking. The flat tax became a huge success and is followed by many other countries. There is a active discussion going on in United States, Great Britain, Danmark, Finland to do the same thing. Unfortunately too many politicians are afraid of such radical step. They say, that – yes, it works well in these countries, but not in mine. This is not so. Freedom works everywhere, we just must let it in.