Lessons Learned from Socialism


iconOld Soviet bloc countries have had enough with socialism. Perhaps that's why they countries like Russia, Slovakia, Romania, Georgia, Estonia, Latvia, Serbia and Ukraine have adopted a fair tax code that taxes all income at a flat rate. And as Bruce Bartlett points out, they are doing better than if they had implemented a socialist progressive system like we have here in the United States.

Why so much interest in the flat tax? A key reason is that it is far more effective at raising revenue than progressive rates. With progressive rates, it looks as if extra revenue is being extracted from the wealthy. But it is also giving them a powerful incentive to arrange their affairs so as to minimize their tax liability or to evade taxes altogether.

With a flat tax, there is much less incentive to engage in tax avoidance or tax evasion. Also, the knowledge that everyone is being treated equally helps eliminate the culture of evasion that often becomes pervasive in high-tax countries, which often drives even the law-abiding into the underground economy.

Of course a flat tax also gets rid of the annual vote buying schemes that American politicians use to maintain their hold on the reins of government. That's probably why we won't see a fair tax structure implemented any time soon.


Category:  Fall of Western Civilization
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