The Matt Cockburn Fake Radio Show

17 July, 2008- I’m Moving to Bulgaria
17 July 2008, admin @ 8:36 am

Not only is there a bevy of Bulgarian women who wish they hadn’t married thier husbands before hearing me on the show, but also because of this.

Sofia Goes FlatLast week I interviewed the instigator of the world’s lowest flat tax, Svetla Kostidinova, director of the Institute for Market Economics located in Sofia, Bulgaria. Ms. Kostidinova insists that the most amazing part of her story is that the Bulgarian government is still overtly socialist. Nonetheless, she and her colleagues managed to persuade politicians that replacing the existing tax system with a 10% flat tax would increase revenues and give the government extra money to finance social programs and unfunded pensions. If only Nancy Pelosi were as amenable to economic logic and the lessons of the real world.Ms. Kostidinova, who speaks English with a thick Eastern European accent, tells me: “The situation was getting desperate in Bulgaria. We were losing our population and our best workers. They were leaving for Western Europe to find jobs and the No.1 form of foreign capital came from remittances.” All that began to change when the corporate tax was cut to 10% in 2007 and the personal income tax to 10% in January of this year. “We told the politicians that it was symbolically important for Bulgaria to have the lowest flat tax. We were surrounded by flat tax countries, we wanted to be the nation most friendly to capital and business.”Result: A country that ten years ago had a 12% unemployment rate now has a 6% jobless rate. Instead of people leaving Bulgaria to find jobs, “now it is the reverse. Western Europeans now come to Bulgaria for jobs. We’re gaining population now,” she says.Bulgaria is one of 24 nations, most of them in Eastern Europe, that have adopted the flat tax. A unique feature of the Bulgarian system is an absence of exemptions — everyone pays the 10% tax regardless of income. Because the rate is so low, Ms. Kostidinova says, the plan’s promoters figured that everyone could afford to pay. But don’t lefties insist that the rich should pay more? “Of course, many do, and they want to raise the rates, but most understand that the flat tax gives us more jobs and more revenues.”If avowed socialist politicians in East Europe are open to new ideas about how to make their tax systems more growth-oriented, why aren’t Republicans or Democrats in Washington? Says Richard Rahn, former chief economist for the U.S. Chamber of Commerce and now an economic consultant in Eastern Europe: “These countries understand that the flat tax is the key to their prosperity — even the former communists.” Only stultified political tactics — certainly not clear thinking — explains why somebody like Barack Obama could be running on a platform of making America’s tax rates among the highest in the world when other nations are proving the competitive advantages of flatter tax systems.

– Stephen Moore

  

2 Commenti a “17 July, 2008- I’m Moving to Bulgaria”

1. JOHNSON — August 11, 2008 @ 3:49 pm
   

   Sno, what do you think of the flat tax? I LOVE the idea of a Flat Tax in the States. Frankly, I have always thought that it makes sense. I can’t imagine how we can possibly try to fix our economic woes (let alone our constitutional ones) without a Flat Tax? How can anyone have a problem with a Flat Tax? Really! Something Matt and I totally agree on!!!

2. Sno — August 13, 2008 @ 1:14 pm
   

   Everything that is made for reducing the taxes and helps for increase the incomes, is a good thing.And is even better when you pay the taxes,knowing that they will be used in purpose-pension that give the old people normal way to meet the daily needs,good monthly motherhood support,visible support for the invalid people who even cant go to the store or get on the bus because there are no equipments.And these are some of the problems…
   Do you know which nation is the happiest in the world?Denmark.And not because they are the richest but because their economy is working FOR them.It gives them good salaries,it works for their healthy mentality,making them able to work.
   Svetla Kostadinova says that the bulgarians started to return here when the flat tax was adopt.Not exaclty i think…In the resent years many foreign companies and investors have been brought.Some of them refused to invest their money. But others made the first step and succeeded.They gave many working places.So, one group came back because of that.The other group came back after 10,15 years being abroad.After the acception of Bulgaria into the European family,its easy to travel and work in the europeans countries and coming back is not a big issue.With the experience and the capital,the bulgarians who returned can allow to start business and give working places of other bulgarians.
   How the flat tax is reflecting on us?I think it will start to work for us after 3,4 years.
   Yeah its the lowest in Europe.But how low is for the bulgarians?BUT i say-Lets think positive.
   The flat tax is a good move…yeah…i hope so.
   Svetla Kostadinova.I like her.She is fresh and smart young lady.
   The word i liked most in the text above is Prosperity.

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