quarta-feira, outubro 13, 2004
Artigo na Tech Central Station.
Leading his coalition to election victory in the autumn of 1992, the 'golden boy' of Estonian politics, the then 32-year-old Mart Laar compiled a youthful government to push through many of the most difficult 'shock therapy' reforms, guided by an extremely liberal economic outlook. Mart Laar* was an historian with limited knowledge of economics. In the absence of a 'driving manual' on how to transform a command economy into a free market economy, he had to rely on some basic fundamental economic thoughts, such as the idea that lower taxes will lead to higher public revenues. (...) Though modest tax reductions became fashionable in its wake, the idea had never been put into practice in a radical way. It was Estonia which set the ball rolling with a flat-rate 26 per cent income tax. The philosophy behind the flat-rate tax is simple. People that work more and earn more should not be punished for it. Progressive taxes act as a disincentive. In Estonia, the flat-rate tax fostered capital formation, lead to higher productivity levels, higher wages, and job creation. Moreover, a flat income tax rate is easy to collect and control. Today Estonia is even considering a further reduction in tax rate, to 20%.
Moreover, Estonia abolished all import tariffs, it introduced a balanced budget required by law, massive deregulation and so on. Estonia also abolished it corporate tax on reinvested profits. (...)
In its economic policy design Estonia has followed Milton Friedman's ideas of liberalism. As Mart Laar stated: 'Especially in a transition country, where the economy has to move from a fully government-controlled system to a market based one, it is very important to free the private initiative and give freedom of action to create economic value. The government must not punish entrepreneurial people; it has to encourage them, also through the tax system. The government must ensure the fair play only.
This is all a far cry from the thinking which seems to prevail in an number of countries of 'old Europe'. Proposals to harmonize taxes invoke images of tax cartels with minimum tax levels, squeezing the taxpayer and killing incentives.
posted by Miguel Noronha 2:48 da tarde
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