The "Progressive" Threat to Baltic Exceptionalism

I ’m a big fan of the Baltic nations of Estonia, Latvia, and Lithuania.These three countries emerged from the collapse of the Soviet Empire and they have taken advantage of their independence to becomesuccessful market-driven economies.One key to their relative success is tax policy. All three nations haveflat taxes. Estonia ’s system is so good (particularlyits approach to business taxation) that the Tax Foundation ranks it asthe best in the OECD.And the Baltic nations all deserve great praise forcutting the burden of government spending in response to the global financial crisis/great recession (an approach that produced much better results than the Keynesian policies and/or tax hikes that were imposed in many other countries).But good policy in the past is no guarantee of good policy in the future, so it is with great dismay that I share some very worrisome news from two of the three Baltic countries.First, we have a grim update from Estonia, which may be my favorite Baltic nation if for no other reason than thehumiliation it caused for Paul Krugman. But now Estonia may cause sadness for me. The coalition government in Estonia has broken down and two of the political parties thatwant to lead a new government are hostile to the flat tax.Estonia ’s government collapsed Wednesday after Prime Minister Taavi Roivas lost a confidence vote in Parliament, following months of Cabinet squabbling mainly over economic policies. …Conflicting views over taxation and improving th...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs