Richard Rahn about Bulgaria

This is how the article, written by Richard Rahn, and published at the Washington Times begins:

Can you name a country that has a flat 10 percent income tax on both personal and corporate income, and that is also running a budget surplus of 8 percent of gross domestic product (the equivalent of the United States running a budget surplus of more than $1 trillion)? The surprising answer is Bulgaria, formerly one of Europe’s most backward countries.

and it continues:

The income tax rate cut in Bulgaria caused its economy to grow more rapidly, and hence there was a surge in the VAT (value-added tax) and other consumption tax revenues, as well as a reduction in the underground economy. This year, the Bulgarian economy will grow about 4 times faster than the average of the European Union (of which Bulgaria is a member). Given the success of the flat tax, many who initially opposed it now claim to have supported it all along.
Bulgaria privatized its banks, did not create semi-socialist mortgage banks like Fannie Mae and Freddie Mac, has required banks to keep adequate reserves (which now average 13 percent, about double the U.S. average), and now is in a much better position to weather the international financial crisis.

I highly recommend that you read the whole article at the Washington Times web site.

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One Response to Richard Rahn about Bulgaria

  1. Cristian Chidesa says:

    I think it would be useful to have in East Europe (Russia, Ukraine,
    Belarus, Bulgaria, Greece, Serbia, Armenia, etc) a market of new ideas,
    realistic and feasible projects, about which we could find information
    in journals, on Internet, maybe even on TV.
    Personally, I would like to have access to a Website that
    would allow us to choose among such projects in which we might
    decide to invest our money (something similar to the system
    based on company shares in western countries).
    This type of investment gives also a good visibility of
    the money that is invested.
    At the same time, it should be allowed to anyone who
    has the required skills to propose interesting projects
    in order to be analysed by experimented professionals
    in economy and technology.
    If the recommendations of these professionals were positives
    then those projects would be accepted for the database of new projects.
    These project promoters could be rewarded by offering them shares
    for the future project.
    Such economic system which encourages innovative persons and
    facilitates the investments in creative new ideas would allow also to
    create new job opportunities and to absorb unemployed manpower.
    Of course, many of us would prefere to work in a state company or in
    a multinational company which have more stability but almost anyone needs
    an alternative, a plan B (just in case).
    If we want that such economic system works efficiently and reliably,
    we need a legal framework, simple and clear, which should facilitate
    such type of investment.
    The politicians from East Europe could significantly help to
    establish such legal framework which should encourage and
    protect autochthonous entrepreneur citizens.

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