March 22, 2005
Europe’s Flat Tax Revolution
The Adam Smith Institute in the UK reports on the growing trend in Europe to move to flat tax systems. They note, correctly, that a low flat tax increases compliance, reduces barriers to investment and growth, while actually increasing government revenues. As we supply-siders would say, “A rising tide lifts all boats.”
This, as is expected, has caused an uproar across the rest of Europe. The powers that be in the EU are horrendously upset that these upstart nations would dare compete with them by lowering taxes. They fight and fight, but it just doesn’t seem to be working:
Having tried initially to prevent low tax competition through ‘harmonization,’ other EU members are now being forced to examine whether they might have to follow the low tax route in order to remain attractive to investment and industry.
To those of us who believe in free-market economics, this is a striking blow for our side. Members of the American left, who look to Europe as an example of the quasi-socialist nation they would like to form here, can now see that the quasi-socialist model isn’t working. Of course, past history will show that this is not likely to cause them to change their minds, but it is certainly ammunition for those of us arguing against them.
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Hey Warbs, just remember, the first thing that the English Parliament did after the 7 years war was LOWER the taxes on imported molasses to the American colonies in order to increase revenue collected. This was the forerunner of such things as the Stamp Act that led directly to Revolution.
Just something to think about.