November 1, 2003

Please...Can't Bremer be our dictator for just five minutes?

This is really good news for Iraq:

The flat tax, long a dream of economic conservatives, is finally getting its day -- not in the United States, but in Iraq.

It took L. Paul Bremer, the U.S. administrator in Baghdad, no more than a stroke of the pen Sept. 15 to accomplish what eluded the likes of publisher Steve Forbes, Reps. Jack Kemp (R-N.Y.) and Richard K. Armey (R-Tex.), and Sen. Phil Gramm (R-Tex.) over the course of a decade and two presidential campaigns.

"The highest individual and corporate income tax rates for 2004 and subsequent years shall not exceed 15 percent," Bremer wrote in Coalition Provisional Authority Order Number 37, "Tax Strategy for 2003," issued last month.

Voil´┐Ż! Iraq has a flat tax, and the 15 percent rate is even lower than Forbes (17 percent) and Gramm (16 percent) favored for the United States. And, unless a future Iraqi government rescinds it, the flat tax will remain long after the Americans have left.....

....Proponents of the flat tax have long favored this kind of tax system for Iraq. Without much of a framework to start with, Iraq "need not worry about all the political and transition problems that have made adoption of fundamental tax reform here so difficult," Bruce Bartlett, an economist in the Reagan and first Bush administrations, wrote this spring. "It is gratifying, therefore, that leaders of the new Iraq are said to be looking at a flat rate tax system for their country."

Bartlett, once an aide to Kemp and now with the National Center for Policy Analysis, said the model for Iraq should be Russia, which in 2001 set a 13 percent flat tax on individual income. The Bush administration, still disturbed by much higher tax rates here, has said it admires Russia's flat tax. Russia "understands the importance of getting the tax structure right in your economy," Commerce Secretary Donald L. Evans told the conservative Heritage Foundation last year.

President Bush, in Russia last year to see President Vladimir Putin, said: "The good news is that the flat tax in Russia is a good, fair tax -- much more fair, by the way, than many Western countries, I might add.".... (Via Rand Simberg)

The Russian flat tax has been a huge success. The low rate has actually resulted in increased tax revenues. And the low rate combined with the fairness and simplicity of the system have stimulated economic growth.

Posted by John Weidner at November 1, 2003 10:02 PM
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