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.