Atleast 24 nations have adopted some form of single-rate tax regime. These reforms have generated impressive results, including faster growth, more jobs, and increased competitiveness. While politicians generally are most concerned about losing tax revenue, they should not worry. Flat tax systems oftentimes generate higher tax revenues because of more income and better compliance.
Market-oriented tax policy has played a key role in Iceland’s rebirth. Major tax reforms include slashing the corporate tax rate from 50 percent to 18 percent, abolition of the wealth tax, a low-rate 10 percent flat tax on capital income, and an intermediate-rate 36 percent flat tax on labor income. These supply-side reforms, along with policies such as privatization and deregulation, have yielded predictable results. Incomes are rising, unemployment is almost nonexistent, and the government is collecting more revenue from a larger tax b