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J.K. Lund's avatar

Estonia and Poland are success stories that we ought to be talking more about.

Estonia’s tax system is about as close to ideal as one can find in the real world:

A simple flat VAT

Corporate tax only on distributed profits

Can file in five minutes online

It should not be surprising then that Estonia is also one of the fastest-growing economies on Earth. Imagine how much growth the US could unlock if it simplified its tax code?

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Anton Frattaroli's avatar

Using Estonia’s Gini vs Italy’s as proof that flat taxes and low rates create equality is a textbook case of confusing correlation with causation. Estonia’s young economy is still in productivity catch-up. Italy’s is weighed down by decades of credit-driven inequality and Eurozone debt. Taxes tweak the surface. Credit and productivity drive the core of inequality.

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Olivier Roland's avatar

You're missing the point of my argument.

Which is: some countries make better use of taxes to reduce inequality than others.

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El Dingo Digital's avatar

Interesting analysis.

This does assume that 1) taxes + redistribution payments are the only way to have equal outcomes for income and that 2) equal outcomes (vs equality of opportunity) is the right goal for a country. :-)

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