Tax reform devotees in the U.S. are looking to formerly Communist nations of eastern Europe for the realized joys of a flat tax. Others in the E.U. think it just isn't fair. From a Christian Science Monitor report:
Last January, Slovakia became the sixth Eastern European country to adopt a flat tax, which means all income-earners pay the same rate. Since then, Romania and Georgia have followed suit, creating a global proving ground for the concept. In the process, flat-taxers have moved Eastern Europe from a Communist backwater to an investment spring—pressuring its higher-taxed Western neighbors to adapt to the new environment.
…..Eastern Europe's cheaper labor market and growing reliance on flat taxes leave Western European economies struggling to compete.
Leaders such as Chancellor Gerhard Schroeder say that the Eastern European countries steal business with their low tax rates while at the same time benefiting from European Union (EU) aid.
Last year, former French Finance Minister Nicolas Sarkozy said that if the new states were "rich enough" to introduce a flat tax they wouldn't need EU funds. France and Germany want to harmonize tax rates within the EU, and bring flat-tax rebels under a unified code.