Wednesday, March 10, 2010

Flat Tax Chronology

A chronology of countries that have adopted a flat tax, indicating the year of adoption, the personal income tax rate, and the corporate income tax rate appears below.

Flat Tax Jurisdictions
Jurisdiction Year of Implementation Personal Tax Rate Percent Corporate Tax Rate Percent
Jersey 1940 20 20
Hong Kong 1947 16 17.5
Guernsey 1960 20 0
Jamaica 1986 25 33.3
Estonia 1994 21 0
Latvia 1995 25 15
Lithuania 1996 24 15
Russia 2001 13 24
Serbia 2003 14 10
Iraq 2004 15 15
Slovakia 2004 19 19
Ukraine 2004 15 25
Georgia 2005 12 20
Romania 2005 16 16
Turkmenistan 2005 10 20
Trinidad & Tobago 2006 25 25
Kyrgyzstan 2006 10 10
Albania 2007 10 20
Iceland 2007 35.7 18
Macedonia 2007 10 10
Mongolia 2007 10 10,25
Montenegro 2007 9 9
Kazakhstan 2007 10 15
Pridnestrovie 2007 10 0
Bulgaria 2008 10 10
Czech Republic 2008 15 15
Mauritius 2009 15 15
FBiH 2009 10 10
Belarus 2009 12 24
Belize 2009 25 25

A few comments on the table are in order. All but the first four entries were implemented after the collapse of the Soviet empire, most being former states within the Soviet Union. The spread of the flat tax was contagious, as one country after another enacted flat taxes to maintain competitiveness with neighboring countries to attract both foreign and domestic investment.

The more recent entries in the table have tended to enact very low flat rates, with the modal rate at 10 percent. Thirteen have unified their personal and corporate income rates, with the others maintaining different rates between personal and corporate tax rates.

6 comments:

charlie said...

Iceland doesn't have flat tax anymore. From 2010 it has 3 rates: 24.1%, 27% and 33%.

https://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Intl%20Tax%20and%20Business%20Guides/2010/dtt_tax_highlight_2010_Iceland.pdf

Colin Gebhart said...

I strongly support simplifying the US tax code, but I am against a flat tax.

I find it interesting that out of the countries list with a flat tax, the only ones I recognize with a vibrant private economy are Belize and Hong Kong. Iceland did have an thriving economy, but its rise and subsequent fall, likely had nothing to do with their now canceled flat tax policy.

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mewmewmew said...

As a poor person, I am against a tax that would make me pay more tax. I pay little to no tax now on my tiny income. Under a flat tax, I would have to cough up thousands. And who benefits? Just the rich and corporations.





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charlie said...

@mewmewmew

I see that you don't really understand what flat tax is. If you don't pay now any income taxes, then you won't need to pay it under flat tax;)

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