Monday, August 20, 2007


Sometimes, it is somehow embarrasing to see what Slovenian policymakers missed-out when they agreeably said no to radical tax reform to simplify the current compliance burden of complexity of the tax code and to replace Slovenia's previous five-rate taxation with a single flat-rated tax on individual income with standardized general allowance. Despite the countless benefits that accelerated tax reductions would bring to Slovenia's economy; trade unions, pension lobbies, interest groups, and influential media figures; all of them raised voices against the flat tax with no particular reasons as far as I understood them.

Bloomberg's critic of Slovenia's communist shadows is great and when you walk down the street in Ljubljana, it is not hard to find-out that you came in a country governed by Marxist thinking. Retired people, complaining about low pensions, job skippers complaining about low salaries and trade unions outbursting old fashioned Soviet-styled symbols and red flags, raising voices against wage inequality saying the old-fisted labor pariah that 'rich are getting richer...'

Not a lot people here in this country realize that even the majority of economy is uncompetitive to the rest of the Europe, except for the export sector accounting the greatest slice of contribution to GDP growth. OECD's Literacy in the Information Age showed that 3/4 of Slovenes are functionally illiterate, incapable of living the modern information age with skills which they possess.

Slovenian policymakers always endorsed a punitive tax regime. In the communist manifesto, Marx and Engels demanded a heavy progressive taxation plus the abolition of property in land. The nest of Marxist pillar is a common cornerstone of Western democracies. So far in the West, only Iceland abolished the progressive income taxation by applying the single tax rate on personal income. The results of Marxist thinking in the long run are devastating. Taking away tools of decision-making to create, innovate and improve, is like taking away the most valuable abilities we have.

Ultimately, the progressive taxation was the idea of Karl Marx, thoroughly written in communist manifesto. In essence, there is no doubt that progressive taxation is equal to racial discrimination where one standard is prefered as a superiority over another. So, if rent-seekers, interest groups and trade unions, are afraid of adopting a flat tax, are then they also afraid that everyone would be treated equally before the law?

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