Thursday, September 9, 2010

Obama Plants the Seeds of The Flat Tax

Speaking at Cayuhoga Community College in Parma, Ohio, on September 8, 2010, President Obama planted (perhaps inadvertently) the seeds of The Flat Tax.

The president called for full expensing (100% writeoff) of investment in plant and equipment for all U.S. businesses in 2011, thereby removing the current $250,000 limit in Section 179 of the U.S. tax code.

Obama’s 100% first-year writeoff leads, in a few steps, to The Flat Tax.

1. Make expensing permanent.

2. Apply the Alternative Minimum Tax (AMT) to all tax filers at a 19% rate. At the same time broaden the tax base by eliminating all deductions, exemptions, and credits except for a personal allowance.

3. Integrate the corporate income tax with the personal income tax at the same 19% rate. Eliminate double taxation of dividends, tax on capital gains, tax on estates, and deduction of interest.

Voila!

Wednesday, September 1, 2010

Flat Tax Countries and Jurisdictions September 2010

The table that appears below is a [corrected] current list of countries and jurisdictions (some not internationally recognized) that have adopted a flat tax as of September 1, 2010, with the current rates. It replaces an earlier posting that contained some incorrect numbers and dates. [HT: Thanks Charlie]

I have been unable to find the year of implementation for Nagorno Karabakh and Abkhazia.  I include Hungary based on the government's firm statement that a flat tax will begin on January 1, 2011.  Detailed information about the specific countries appears in previous posts, including an explanation of Paraguay's inclusion.

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
Tuvalu 1992 30 30
Estonia 1994 21 0
Lithuania 1994 15 15
Grenada 1994 30 30
Latvia 1995 26 15
Russia 2001 13 24
Serbia 2003 12 10
Iraq 2004 15 15
Slovakia 2004 19 19
Ukraine 2004 15 25
Georgia 2005 20 20
Romania 2005 16 16
Turkmenistan 2005 10 20
Trinidad & Tobago 2006 25 25
Kyrgyzstan 2006 10 10
Albania 2007 10 10
Macedonia 2007 10 10
Mongolia 2007 10 10,25
Montenegro 2007 9 9
Kazakhstan 2007 10 15
Pridnestrovie 2007 10 0
Mauritius 2007 15 15
Bulgaria 2008 10 10
Czech Republic 2008 15 19
Timor Leste 2008 10 10
FBiH 2009 10 10
Belarus 2009 12 24
Belize 2009 25 25
Nagorno Karabakh   5 5
Seychelles 2010 15 35
Paraguay 2010 10 10
Hungary 2011 16 10
Abkhazia   10 18