Saturday, December 31, 2011

Flat Tax Roundup 2011

No major flat tax developments transpired in 2011, either in new countries getting on the bandwagon or existing flat-tax countries falling off.

Vietnam has joined the list of countries-- Malta (15%), Andorra (10%), Malaysia (15%)--that tax non-residents at a flat rate, set at 20%, while residents pay graduated rates up to 35%.

The big news is the revival of the flat tax in the campaign for the Republican presidential nomination.  Herman Cain (since withdrawn), Rick Perry, and Newt Gingrich have explicitly proposed a flat tax.  If either Perry or Gingrich win the nomination, the flat tax will be a major issue throughout the campaign.  Although Jon Huntsman signed a flat tax into law in Utah, he proposes three federal income tax rates.  Mitt Romney plans to lower rates in the future, but is not proposing an immediate major reform.  Michele Bachmann, Rick Santorum, and Ron Paul support reform and lower rates, but none of these seem likely to secure the nomination.