Baltic Tiger on the prowl

"The tiny country of Estonia, or the 'Baltic Tiger,' as it’s known in Europe, is quickly rising from its dark past of Soviet domination and is now considered, according to the 2006 State of World Liberty index, the world leader in economic and political liberty. The United States was ranked as eighth and, Surprise! North Korea was dead last out of the 159 countries.

Estonia’s success is largely attributed to Mart Laar, a history teacher who became prime minister after Estonia’s liberation from the USSR in 1991. Inspired by author Milton Friedman (whom the Soviets hated), Larr privatized a large portion of the government sector, struck down almost all tariffs and implemented a flat income tax of 26 percent. Job earnings have skyrocketed because of foreign investment and tax revenues have been so unexpectedly high that the flat tax is being steadily cut down to 20 percent.

'People think a progressive tax system is fairer,' Laar says to critics of his flat-tax plan, 'but in the real world rich people find a way to avoid high taxes. With a flat tax, they stop worrying about sheltering their income or working in the gray economy. There is less corruption because it’s easier to pay the tax.' "

Source: The Patriot