Every since the current government won a landslide election, there’s been a widespread assumption that Hungary would be the next nation in Europe to hop on the flat tax bandwagon. Well, the assumption has become reality. Here’s a report from Tax-news.com.
The Hungarian parliament has approved the government’s 2011 tax bill, which introduces a flat rate personal income tax of 16%, and grants a 10% corporate tax rate to certain companies from next year. The bill also contains a highly controversial amendment to the country’s original bank tax legislation. Hungary’s 2011 tax bill, which was adopted by 259 votes to 104, provides for a 16% flat rate of personal income tax in a bid to boost domestic demand. It also reduces the corporate tax rate from 19% to 10% for all companies from January 1, 2013.
It’s a bit disturbing to see that Keynesian theory (“boost domestic demand”) was part of the rationale for this tax reform, but I’m not going to quibble. Any port in a storm, as the saying goes.
So it’s time to cue up the flat tax theme song and celebrate the growing list of flat tax nations. More than 30 nations now have the morally and economically superior tax regime, a remarkable increase since I narrated a video two years ago and there were only 25 countries on the list.
