Nacional - Croatia's Independent Weekly Features Adriatic Institute's Open Letter to Finance Minister Ivan Suker Open Letter Highlights Hungary's Center-Right Government Announcing a Flat Tax of 16% and AI's Principled Proposal for a 15% Flat Tax for Croatia Nacional - Croatia's independent weekly published Adriatic Institute's open letter to Croatia's Minister of Finance Ivan Suker and specifically communicating the urgency for Croatia's government to implement pro-growth reforms by first applying a 15% flat tax on personal and business income. The recent news of Hungary's announcement of a flat tax of 16% (implementation date Jan 1, 2011)increases regional tax competition. Moreover, countries in Central and SE Europe are competing for foreign direct investment and jobs - and the flat tax is an extraordinary incentive for entrepreneurs and business leaders. According to Nacional's main editor Marko Custic, the AI open letter was selected for the editor's choice section and the response from readers made it to the top categories of being the 'most read' and 'most commented'. Since the launch of The Adriatic Institute and the International Leaders Summit in 2003, the two initiatives have consistently and faithfully advanced the Hall-Rabushka flat tax model in SE Europe. The inaugural International Leaders Summit in Zagreb, Croatia featured Dr. Alvin Rabushka, senior fellow, The Hoover Institution at Stanford University, Palo Alto, California and AI's founding leadership board member along with Ivan Miklos, Slovakia's deputy prime minister and finance minister who implemented the 19% flat tax in his country and Ivan Suker, Croatia's minister of finance who advocated the progressive tax system. The co-founders of the Adriatic Institute also published a book on tax reform for SE Europe titled: The Flat Tax - The Case for Tax Reform which has been reviewed by elected officials and policy-makers in the region. NACIONAL Ministar financija Ivan Šuker Adriatic Institut za javni poredak, think-tank sa sjedištem u Rijeci, pozvao je hrvatskog ministra financija Ivana Šukera da se odrekne porezne politike visoko progresivnog oporezivanja dohodaka. “Hrvatski… Više Izdvojene temeOtvoreno pismo ministru financija Ivanu Šukeru Full text (Croatian text)Main points and summary - translated into English from the original Croatian text: Mr. Suker (Croatia's finance minister), time is running out - and the flat tax is gaining momentum. Croatia’s neighbor, Hungary, just announced the forthcoming adoption of the 16% flat tax. Today, nearly 275 million citizens and taxpayers in Eastern Europe live in flat tax nations. Croatia's 4 million have been on the losing side. Croatia's businesses and foreign investors will do much better going to places that have lower taxes in SE Europe. The distributive role of Croatia's current highly progressive income tax is not able to achieve neither higher economic growth nor social objectives of demagoguery "taking from the rich to give to the poor". Croatia's policy of killing two birds with one stone (combined tax and social policy in a highly progressive tax system) is releasing the politicians from the accountability and transparency of government spending. You may recall that we brought the father of the modern day flat tax - Dr. Alvin Rabushka to Zagreb, Croatia in 2004 and 2005. Dr. Alvin Rabushka, senior fellow, The Hoover Institution, Stanford University, Palo Alto, California, clearly articulated the importance for Croatia's elected officials to seriously consider adopting the pro-growth tax reform initiative. In 2004, you spoke on a tax panel along with principled reformers: Dr. Alvin Rabushka along with Ivan Miklos who implemented the flat tax in Slovakia when he was deputy prime minister and finance minister. The message was simple: The successful flat tax reform brings in greater revenues and provides room for structural reforms. If Croatia adopted 15% flat tax on personal and corporate income in 2006, as suggested by the Adriatic Institute, it could have reigned government spending, attracted foreign direct investment, make Croatia's entrepreneurs and companies more competitive, increased employment and achieve higher rates of economic growth. Croatia's unemployment rate of 18%, economic downturn of 5.8% in 2009 and 2.5% in the first quarter of 2010 could have been mitigated if Croatia's government implemented the free market policies, starting with the flat tax in 2006.
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