Final Word from Thursday, May 5, 2005
Finance Minister Bohuslav Sobotka is basing his criticism of ODS's flat-tax plan on the premise that it would only help the rich. He gives a convincing argument when he says that low wage-earners would be hurt if ODS merged the two VAT rates at 15%. ODS's counter-argument is that by imposing a flat 15% income tax, a 15% corporate tax and by eliminating the 15% tax on dividends, businesses would prosper and money flowing to tax havens would stay in the country. There would eventually be a trickle-down effect, goes the argument, because businesses would have more money for employment and development. Even investment incentives could be eliminated, ODS says, because the system would be so attractive for everyone. It's a sound argument, but ODS will have to find a way to explain it so that even those who don't bank in Nauru can understand it. [Czech Republic value-added tax ČSSD]