A fiscal wind

RICHARD CURTIS wonders whether the flat taxes wind from the east threatens our progressive tax régime.

IT SEEMS THAT one cannot open the newspaper lately without reading about flat taxes i.e. the application of a single rather than multiple rates of tax. It was a proposal of Angela Merkel's Christian Democratic Union in the recent German elections and sometimes it appears as though there is a wind of flat tax legislation blowing across Europe from the east. Presumably part of the reason for this geographical spread is that once one country introduces such a tax its neighbours fear a loss of competitiveness in attracting new business to their own country. There is also the fact that there should be administrative benefits for 'transition economies' such as those emerging from the 'eastern bloc' although other western countries such as Spain and Greece are also considering these measures.
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