Alvin Rabushka of Stanford University has publihed a brief paper discussing the spread of flat tax regimes around the world. The global behavior once again demonstrated that smaller and virtually unseen economies tend to absorb their comparative advantages much faster than their hammering counterparts. The tax code in Kyrgyzstan established a 10 percent flat tax on personal and corporate income. The immediate chain reaction move to neigbouring Kazahstan where the policymakers seriously consider the implementation of flat tax and a total re-establishment of the country's tax code. In August 2006, Uzbekistan's parliament adopted the budget which provides for several significant tax cuts. The corporate tax rate will be set at 10 percent in 2007 while individual income tax rates will also rapidly shift toward a lower proportional burden of individual income. Flatter taxes are also spreading across Europe. Czech Republic, Poland, Macedonia and Montenegro are considerable examples of a productive tax policy. Montenegro, for instance, set the corporate tax rate at 9 percent. Signs of improvement in the reduction of tax burden are also seen in Spain and Iceland where significant cuts have been made in terms of reducing gradual levels of taxation.
Further analysis of changes in tax policy will soon be posted on my blog.
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