Tuesday, October 12, 2010

Taxes and growth

The lifeblood of society is work. The lifeblood of government is taxes. Work is sustained by returns and earnings. More work, more earnings. Taxes though, is sustained by coercion. That is why the simplest definition of taxation is "compulsory payment to the government."

The Economist showed a graph in its issue last week, "Effective tax rates", below.

Singapore and Hong Kong remains the top dynamic economies in the world today with low taxes. Russia joined the low, flat tax club only recently, with only about 12 percent income tax rate for both personal and corporate incomes.

Countries that want to atract more foreign businessmen and entrepreneurs should consider joining the low flat tax club. Going rate now for a number of countries is 10 percent flat rate, no other tiers or rates.

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