Sixteen years ago, I wrote a celebratory column because Romanian lawmakers opted to keep their flat tax, notwithstanding pressure from international bureaucracies.

Unfortunately, something bad has occurred since that time. Here’s a chart, based on the IMF’s database, showing what has happened to the the fiscal burden of government in Romania in recent years.

As you can see, both taxes (red) and spending (green) are now consuming much larger shares of Romania’s economic output.

I’ve repeatedly warned (in 2016, 2021, and 2023) that you can’t have a good tax system in the absence of spending restraint, and we now have another example.

The tax-loving bureaucrats at the Organization for Economic Cooperation and Development in Paris are using Romania’s excessive spending as an excuse to push for higher taxes.

The Romania Journal has a depressing summary of the OECD’s recommendations. Here are some highlights, though perhaps lowlights is a more appropriate word choice.

Romania must…increase tax revenues…according to the latest recommendations from the Organisation for Economic Co-operation and Development (OECD). The organization advises rethinking the tax system and moving away from a framework based on low rates… In its most recent economic report presented to the government on Monday, the OECD warns that..Romania’s tax revenue levels are among the lowest in the European Union, and adjustments will be necessary in the coming years. Total tax revenues account for approximately 27% of GDP, while the EU average exceeds 40% of GDP. …The OECD…recommends exploring a progressive taxation system, with higher rates for high incomes… The OECD considers that Romania under-taxes real estate… This would imply significant tax increases in major cities such as Bucharest, Cluj, and Timișoara, especially since all local taxes were already increased significantly from January 1, 2026. The OECD also proposes introducing a tax on profits from the sale of secondary residences. …The organization also proposes increasing excise taxes on fossil fuels (diesel, gasoline), tobacco, and alcohol. …including higher taxes on products high in sugar or saturated fats.

To be fair, there were a few decent recommendations in the OECD report, but the overall message was bad.

Instead of advising Romanian politicians to reverse recent spending increases, the OECD’s bureaucrats are pushing for higher taxes to enable that bigger burden of spending.

Incidentally, I can’t resist pointing out that the OECD’s favored approach will backfire since politicians will enact further spending increases in response to the influx of revenue.

If you don’t believe Milton Friedman is right, I very much encourage you to look at the real-world data from Europe.

I’ll close with this message for my friends at the OECD:

I realize you guys probably are not happy that I repeatedly advise American lawmakers to eliminate subsidies that help pay for your generous tax-free salaries, so here’s a suggestion that will make your lives easier. From now on, when doing fiscal analysis about any country, simply publish a one-paragraph statement that they adopt a low-rate flat tax matched with a Swiss-style spending cap. No need for 144-page reports, like you just did for Romania.

Normally, I would augment the above statement with a sentence about private pensions, especially given the terrible demographics in regions such as Eastern Europe.

But Romania is one of the many European countries to have moved partly in that direction, so no need in this case.

Sadly, even though there are some good economists at the OECD, I don’t think their political masters will allow them to follow my thoughtful and kind advice.

P.S. A smaller burden of government also will help reduce corruption in Romania, as I noted in 2017.