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202-285-0244

CF&P Foundation: Press Release

Center for Freedom and Prosperity Foundation

For Immediate Release
Thursday, May 29, 2008
202-285-0244
www.freedomandprosperity.org

New Video Highlights Global Flat Tax Revolution
Will U.S. Get Left Behind?

(Washington, DC, Thursday, May 29, 2008) -- The Center for Freedom and Prosperity Foundation today released a mini-documentary entitled the Global Flat Tax Revolution. There are now 24 flat tax jurisdictions (actually 25, but we didn't know about Trinidad & Tobago when the video was filmed), a remarkable development given the ideological opposition to tax reform from special interest groups and class warfare advocates.

YouTube Link
http://www.youtube.com/watch?v=qBAr0MzRFU0

Other Links to the video:
            
EyeBlast.TVGoogleYahoo Capitol Hill Broadcast Network

The six-minute video highlights the central features of the flat tax revolution, and provides specific information on the reforms in Hong Kong, Estonia, and Iceland.

Perhaps the most intriguing aspect of the revolution is its popularity in former Soviet-bloc countries. Previously part of the Soviet Bloc, these nations have shed oppressive economic policies in favor of free markets and low taxation. This is a stunning reversal since a so-called progressive income tax was a key tenet of Marx's Communist Manifesto.

"The flat tax revolution is sweeping the world and American policymakers should wake up," said Andrew Quinlan president of the CF&P Foundation. "If the United States goes down the path of higher taxes while the rest of the world is adopting the flat tax, jobs and investment will flee overseas to more competitive economies."

"Our educational videos are designed to succinctly inform viewers about important issues," said Quinlan. "We are very happy with the feedback and we hope our future videos on key economic issues are even more successful. We are particularly pleased that some teachers and professors are using the videos as part of their curriculum."

Here is our link to other CF&P Foundation videos including Tax Competition Primer, Cutting the U.S. Corporate Income Tax and a three-part series on the much misunderstood Laffer Curve.
Link: http://www.freedomandprosperity.org/videos/videos.shtml

Web Links to the Global Flat Tax Revolution  video:

Youtube
http://www.youtube.com/watch?v=qBAr0MzRFU0

Capitol Hill Broadcast Network
http://www.chbn.com/Clip.aspx?key=F14F8D549160963F

EyeBlast.TV
http://www.eyeblast.tv/Public/Video.aspx?rsrcID=2640

Google
http://video.google.com/videoplay?docid=75099102788206779&q=flat+tax+revolution &ei=ubw-SPH8I4WqrwKf7vGOBA

Yahoo
http://video.yahoo.com/watch/2763040/8023941

 

Excerpts from the Video:

Twenty-four nations now have simple and fair flat tax systems. Places such as Estonia, Hong Kong, Slovakia, and Iceland are enjoying rapid economic growth thanks to tax systems that are much friendlier to growth. Flat tax systems also are leading to more revenue in some cases, reaffirming not just ordinary Laffer Curve responses, but also showing that tax cuts sometimes do pay for themselves.

Perhaps most important, the flat tax revolution signifies a victory over the notion that the tax code should be used to penalize those who contribute most to economic growth. The ultimate irony is that this revolution in both economic and moral attitudes is being led by nations in Central and Eastern Europe—countries that were part of the Communist Bloc just two decades ago.

Thanks to tax competition, it is likely that the list of flat tax nations will continue to expand. Because the geese that lay the golden eggs can more easily fly across the border, globalization is putting pressure on politicians to lower tax rates and reform tax systems. Maybe, someday, even France, the United States, and North Korea will have flat tax.

Let's take a moment to describe the key principles of a flat tax. They include:

*A Single Flat Rate, ideally at a low level so that the tax code no longer penalizes productive behavior.

*Elimination of Special Preferences, so that politicians can't trade loopholes for campaign cash and ordinary people can have a simple tax return.

*And, to eliminate the tax bias against saving and investment, no Double Taxation. This means the tax police only get one bite at the apple – so no death tax, no capital gains tax, and no second layer of tax on dividends or interest.

The changes that are sweeping the world are remarkable. Up until 1994, the only jurisdictions with flat tax systems were Hong Kong two other (very obscure) British territories—Jersey and Guernsey, and Jamaica.  Today, by contrast, there are 24 flat tax systems. The flat tax revolution is especially remarkable because so many wanted to dismiss it as a fad. Indeed, as recently as 2006, an International Monetary Fund study boldly stated that, "…the question is not so much whether more countries will adopt a flat tax as whether those that have will move away from it."  Yet within months of the IMF study's publication, four new nations were part of the flat tax club. And more nations approved a flat tax last year.

There is no nation with a postcard-sized tax return, but many countries have done a remarkable job in creating tax codes that address the major goals of a pro-growth tax system.

… Our message is simple: Globalization has had a positive impact on tax policy because governments now have to compete. The Thatcher and Reagan tax rate reductions began the process of tax competition, and the global tax reform revolution is the latest chapter. You can do your part by sharing this video with your friends and colleagues. I'm Dan Mitchell. Thanks for watching.

 

For additional comments:
Andrew Quinlan can be reached at 202-285-0244, andy@freedomandprosperity.org
Dan Mitchell can be reached at 202-218-4615, dmitchell@cato.org

 

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