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It is in the breaking news sidebar!
Posted on 04/15/2003 11:53:50 AM PDT by bruinbirdman
Russia -- leading the way
In Russia, President Vladimir Putin implemented a flat tax in 2001. Not only a flat tax, but a flat tax with a 13 percent rate, 4 percentage points lower than the supposedly "radical" plan espoused by Steve Forbes and former House Majority Leader Dick Armey. And it has been a big success.
Every year, our tax code gets bigger and more complicated. In Russia, by contrast, the flat tax has been in place for more than two years now. And this reform took place in a nation still trying to overcome the legacy of more than 70 years of communist dictatorship.
The Russian flat tax has been so successful that even American politicians might learn the right lessons:
o Russia's economy has expanded by about 10 percent since it adopted a flat tax.
o Over the last two years, inflation-adjusted income tax revenue in Russia has grown 50 percent.
Why? Because people are willing to produce more and pay their taxes when the system if fair and tax rates are low -- exactly what Ronald Reagan predicted when he triggered America's economic boom with lower tax rates 20 years ago. Ironically, the former communists in Moscow now understand supply-side economics, yet liberals in Congress are still relying on the politics of hate- and-envy.
Interestingly, the flat tax is just one of several positive reforms enacted by President Putin:
o Russia also has reduced the corporate tax rate from 35 percent to 24 percent (U.S.-based companies still pay 35 percent, the second-highest corporate tax among industrialized nations).
o Small businesses also get better treatment -- the old system with high tax rates has been replaced by a new system where companies can choose either a 6 percent tax on gross revenue or a 15 percent tax on profits.
Source: Daniel J. Mitchell, "Russia -- leading the way," Washington Times, April 15, 2003.
I did my taxes on TurboTax yesterday and I was surprised to see that my effective tax rate was only 10.5%. The only deductions I had were interest on my home loan, property tax, charitable contributions, two kids, and $3000 college credit.
I'm not saying I don't pay enough taxes, I'm saying maybe we need to think much lower than what Forbes is looking at - maybe 5%.
What's your marginal rate? That is, if you earned one more dollar, what % income tax would you pay (including state income tax on interest and dividends in NH)?
yitbos
o Over the last two years, inflation-adjusted income tax revenue in Russia has grown 50 percent.
Better than I would have even hoped. Excellent news.
If I had to guesstimate, I'd say the rate would be closer to 20%. I didn't pay sales or estate tax. Nor did I have any capital gains.
Now that you've just doubled my tax rate, I don't feel so good. You'd make a great DEMONcRAT President.
The bottom line is - No matter what the tax rate is, our output to the differnet levels of gov't will NEVER decrease. If we cap federal tax, they'll send less back to the states so the states will raise your state taxes (income, sales, ...) and the towns will raise your property taxes. But that's OK 'cause it's all "for the children."
By this, I assume you mean liberals on BITH sides of the aisle. After all, this administration has increased spending by more than any other in God knows when (Johnson, perhaps?).
The fact that it's not being seriously discussed in a clear indication that the Republications are not interested.
That is the objective. Get taxes as close to localities as possible. Close to the people. Where they can see them and maybe even vote on them.
Tax districts, cities, counties, states have all shipped tax collection to the feds because, at the lower levels, taxpayers were screaming and even voting out the spenders.
yitbos
That's rather meaningless considering that it was rebounding off of a 70% contraction.
Why is that meaningless? They could have continued contracting even more.
Will Rogers
Are you suggesting that we confiscate US citizens' gold reserves? I cannot abide that, my friend.
What planet are you on? I was commenting about the Russian economy not the US money supply and precious metals possessed by US citizens. You had stated that the rebound in the Russian economy was inconsequential. I responded by pointing out that the Russian economy might have continued to contract without the change to a low rate flat tax.
Did you buy anything? Maybe you live in a state with no sales tax, but did you buy gasoline, or pay your phone bill? Do you use tobacco products? Don't forget federal sales taxes. (maybe they are called "excise" taxes, but not being a tax expert I don't know what that means other than they are taxes that don't show up on my tax return, but I still have to pay them)
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