Flat tax

I wonder if a flat tax rate spurs economic growth. For example since adopting a flat tax rate of 13%, Russia’s economy has been growing faster than America’s economy. Hong Kong has had a flat tax for a long time, and has been the world’s fastest-growing economy over 50 years. A flat tax would sure be nice from a personal viewpoint. Every April I have the option of giving 300 or bucks to H&R block or wasting an entire day on my taxes.

What may have had a greater effect on economic growth is that Russia also has reduced the corporate rate of tax from 35 percent to 24 percent. (U.S.-based companies still pay 35 percent, the second-highest corporate tax among industrialized nations). 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 The old system with high tax rates has been replaced by a new system where companies can choose either a 6 percent tax on gross revenue or a 15 percent tax on profits.

One Response to “Flat tax”

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