Originally published February 4 2006
Estonia finds success with the flat tax
by Mike Adams, the Health Ranger, NaturalNews Editor
Estonia was the first country to adopt the flat tax in 1994, and overall, the plan is working. Estonia's economic growth in the last quarter and its rapid modernization have given the country the nick-name "E-stonia."
Estonia, one realizes after a few days in the abiding twilight of a Baltic winter, is not like other European countries.
The first tip-off is the government's Cabinet room, outfitted less like a ceremonial chamber than a control center.
Each minister has a flat-screen computer to transmit votes during debates.
Then there is Estonia's idea of an intellectual hero: Steve Forbes, the American publishing scion, two-time candidate for the Republican presidential nomination and tireless evangelist for the flat tax, where everyone pays the same rate.
Fired with a free-market fervor and hurtling into the high-tech future, Estonia feels more like a Baltic outpost of Silicon Valley than of Europe.
"I must say Steve Forbes was a genius," Prime Minister Andrus Ansip declared during an interview.
Estonia became the first country to adopt it in 1994, as part of a broader strategy to transform itself from an obscure Soviet republic into a plugged-in member of the global information economy.
Estonia's economic growth was nearly 11 percent in the last quarter --- the second-fastest in Europe, after Latvia, and a pace more reminiscent of China or India than Germany or France.
People call this place "E-stonia," and the cyber-intoxication is palpable in Tallinn's cafes and bars, which are universally equipped with wireless connections, and in local success stories like Skype, designed by Estonian developers and now offering free calls over the Internet to millions.
The flip side of Estonia's market ethos is a thinner social safety net than in Europe's welfare states.
Opponents of the flat tax here say it has widened the divide between rich and poor, making Estonia less like its Nordic neighbors and more like the United States.
Latvia, Lithuania and Slovakia all have a flat tax, while the Czech Republic and Slovenia have considered one.
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