Thursday, February 11, 2010

A Modest Proposal for Greece

There is a simple solution to address the problem of massive tax evasion that has put Greece's public finances and debt in peril.

Greece can learn from Hong Kong. Enact a low flat tax that includes a version of Hong Kong's "Prevention of Bribery Ordinance". That ordinance, imposed in the mid-1970s to break a ring of political corruption, allowed the government to prosecute any public official living beyond his means who cannot show legitimate sources of income which fund that lifestyle. In addition, several high profile individual tax cheats should be aggressively prosecuted, as was done in Russia, to encourage full compliance.

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