Estonia’s Flat Tax

Students For Liberty write on how Estonia’s flat tax came to be.

“He had read exactly one book on economics: Milton Friedman’s Free to Choose. He used it as a policy manual”

In 1992, a 32-year-old historian became Prime Minister of Estonia. He had read exactly one book on economics: Milton Friedman’s Free to Choose. He used it as a policy manual. Western advisors and Estonian economists told him it would fail.

After gaining independence from Soviet Union in 1991, Estonia had a destroyed economy. Inflation over 1,000%. Output falling 30% a year. Massive shortages of fuel and food. 95% of the economy state-owned. 92% of trade locked to a Russia that had stopped paying. The standard recipe for transition economies was gradualism. Step by step. Protect vulnerable sectors. Let the market adjust slowly.

Mart Laar took office in October 1992. Months earlier, Estonia had already broken from the Ruble and launched a new currency, the Kroon, anchored to a strict currency board. The IMF had cautioned against the rigid currency board, warning it would leave no room for monetary policy. Laar refused to loosen it and made it the foundation for everything that followed.

“On January 1, 1994, he did the thing nobody had done before: a 26% flat tax. Same rate for individuals and corporations”

Then he abolished tariffs. Not negotiated. Not phased. Unilateral. Estonia became one open trade zone with no protection for agriculture and no protection for industry. Western advisors warned the domestic economy would collapse.

He privatized fast. By 1994 most state enterprises were in private hands, sold through open public tenders modelled on the German Treuhand to keep oligarchs out. On January 1, 1994, he did the thing nobody had done before: a 26% flat tax. Same rate for individuals and corporations. A basic tax-free allowance for low earners, but no progressivity above it.

No democratic country had ever implemented a flat tax of this kind. Mainstream Western economists called it reckless. They wrote that the poor would carry the burden and that state revenues would collapse. Estonian economists at home told him it would not work. He did it anyway.

“The reforms compounded. By 2003, Estonia had high-speed internet across the entire country and a working digital government”

Then the numbers came in. Estonia grew faster than any other country in Central and Eastern Europe through the rest of the decade. It pulled in more foreign investment per capita than any of its neighbours. By 2000, GDP was growing 6.4% a year.

The reforms compounded. By 2003, Estonia had high-speed internet across the entire country and a working digital government. That same year, a team in Tallinn shipped Skype. A country that had inherited barely functioning Soviet telephone lines was now exporting communication software to the world.

“He didn’t know no country had tried it. He found out afterward. He said that if he had known, he might not have done it”

In 2011, Estonia joined the euro. It met every Maastricht criterion and entered with the lowest public debt in the entire EU. Balanced books, stable inflation, debt below 7% of GDP. A former Soviet republic was the most fiscally disciplined country in the room.

Years later someone asked Laar where the flat tax idea came from. He said he had read Free to Choose and assumed the West had already done it. He didn’t know no country had tried it. He found out afterward. He said that if he had known, he might not have done it.

The experts knew too much. They knew every objection, every precedent, every reason a clean break could not work. Laar didn’t know the objections, so the objections didn’t stop him. He took Friedman at face value and acted.

Latvia copied the flat tax in 1995. Lithuania the same year. Slovakia, Romania, Russia, Georgia, and Ukraine followed over the next decade. Estonia’s GDP per capita overtook Greece’s in purchasing-power terms in the 2010s. The country now produces more unicorn startups per capita than any other in Europe: 7.7 per million people, more than double the runner-up.

Reproduced with kind permission of Students for Liberty. You can find the original X thread at https://x.com/sfliberty/status/2063023739772559698?s=46, find them on X at  https://x.com/sfliberty you can also find them online at https://studentsforliberty.org/.

International Libertarians – Claudia Barrett-Hogarth of the United Independents’ Congress of Jamaica

The United Independents’ Congress of Jamaica (UIC Jamaica) rose to prominence in 2021 when its Founder and President, Joseph L. Patterson, was arrested for leading a Freedom March on Parliament, against draconian Covid-19 measures.  We spoke with their General Secretary Claudia Barrett-Hogarth.  The party is a member of International Alliance of Libertarian Parties.

“political power should be restored to ordinary citizens, not concentrated in the hands of wealthy special interests, entrenched party structures, or political elites”

Can you introduce yourself to our readers, and tell us a bit about your party?

My name is Claudia Barrett-Hogarth. I am a retiree and farmer from the parish of St. Catherine, Jamaica, and I serve as the General Secretary of the United Independents’ Congress of Jamaica, commonly known as UIC Jamaica or simply the UIC.

The UIC is Jamaica’s third registered political party and its first national grassroots political and liberation movement. We are organized around the principle that liberty and personal dignity are rights inherent in the individual and uncompromisable for any individual, body or government to override or contravene. We also believe that political power should be restored to ordinary citizens, not concentrated in the hands of wealthy special interests, entrenched party structures, or political elites. The movement is funded, built, and sustained by ordinary Jamaicans at home and in the diaspora who volunteer their time, resources, skills, and voices because they believe in the UIC’s vision, mission, philosophy, core values, and objectives.

Our Mission is “to create the Non-Partisan Constitutional Republic of Jamaica that protects our individual liberty and promotes personal responsibility in a safe, clean and orderly society where everyone can live, earn and retire with dignity in true liberty”.

This mission is reflected in our Core Values: Individual Liberty; Personal Responsibility; Equal Opportunity; Equal Rights; Equal Justice; A Safe, Clean & Orderly Society; and A Free and Fair Market Economy.

“Our Mission is “to create the Non-Partisan Constitutional Republic of Jamaica that protects our individual liberty and promotes personal responsibility”

The UIC believes that many of Jamaica’s greatest problems are rooted in a lack of true individual liberty, personal responsibility, equal rights, justice, opportunity, public order, and a genuinely free and fair market economy. These failures are the result of bad governance. We therefore emphasize the rights of the individual and the need to limit government to its proper place and function, as outlined in our Philosophy:

“It is the right of every human being to be free. Therefore, the only moral justification of and rightful purpose of government is to protect the life, liberty and property rights of every citizen equally. Good Governance, therefore, is the protection of individual liberty and property rights; the promotion of personal responsibility; and the provision of a safe clean and orderly society that protects our individual and collective sovereignty. This is the only sure foundation for a truly free, fair, peaceful and prosperous society.”

“We believe Jamaica does not merely need a change of political managers. Jamaica needs a change of system”

What do you see as the major challenges facing Jamaica, and what policies is the party championing?

The major challenge facing Jamaica, from which many other problems arise, is bad governance. For over 80 years, Jamaica has suffered from corruption, mismanagement of public funds, excessive centralization of power, weak accountability, and an overbearing political culture that has too often placed partisan interests above the national interest.

The results are visible: high levels of crime and violence, persistent poverty, a weak and underperforming economy, devaluation of the Jamaican dollar, an undereducated citizenry, brain drain, poor roads and infrastructure, and inadequate delivery of essential public services.

The UIC is therefore championing a fundamental transformation of Jamaica’s governance model. Our policy direction includes moving Jamaica toward a Non-Partisan Constitutional Republic, strengthening checks and balances, removing the power of political parties and their neocolonial masters over the state, empowering citizens directly, protecting individual liberty and property rights, reforming taxation, creating a free and fair market economy, and building a safe, clean, orderly, and prosperous society.

We believe Jamaica does not merely need a change of political managers. Jamaica needs a change of system.

“We believe a simpler, fairer, and more disciplined taxation system would reduce wasteful spending and encourage productivity”

If you could introduce policies to change just three things in Jamaica, what would they be?

If the UIC were in a position to introduce policies to change three things in Jamaica, we would focus on the following:

First, we would overhaul the system of governance and elections. 

Jamaica’s current system does not give taxpayers proper value for money, nor does it provide sufficient protection against the abuse of power. We would seek to remove the unfair influence of wealthy special interests and entrenched partisan machinery by creating a system in which candidates must first pass a basic governance test, submit to public audit and vetting, and then be nominated on merit.

Once nominated, candidates would receive equal access to public campaign opportunities, including town halls and equal access to television, radio, print, and social media coverage. This would help ensure that elections are based on competence, character, public trust, and policy ideas rather than money, tribalism, or party machinery.

We would also remove partisan tribalism from all levels of governance. Representatives would be elected as individuals on their own merit, not as agents of a party. In the legislature, there would be no separation by party colours or party blocs, but a united, non-partisan Congress of Representatives.

We would also introduce stronger checks and balances. This would include a nationally elected President, elected Vice Presidents representing Jamaica’s three counties, independently elected Senators representing the parishes, and Ministers or Department Secretaries selected for subject-matter competence, publicly vetted by the independent elected Senate, and approved through transparent voting in the House of Representatives. Judges would be appointed through a similarly accountable process. The purpose would be to prevent the concentration of power, reduce conflicts of interest, minimize nepotism, and protect public resources.

Second, we would reform taxation and government revenue.

The UIC would limit government revenue to service fees, a 10% income tax from all sources of income, and a 10% sales tax. The 10% sales tax would be reserved for emergencies, poverty reduction through a workfare programme, and national beautification.

We believe a simpler, fairer, and more disciplined taxation system would reduce wasteful spending and encourage productivity. Health and education should be run as genuine public and corporate services in which the people are stakeholders. With better governance, lower waste, and stronger accountability, these services can be more efficient and properly funded.

The dedicated sales tax would help Jamaica build an emergency reserve, beautify the environment, reduce dependency on borrowing, and systematically address poverty. The goal is to ensure that the country becomes cleaner, safer, more beautiful, and more dignified, while ensuring that those who need support are provided with good housing, healthcare, nutrition, and education, so long as they are willing to work and contribute through the workfare system.

“Land that is not being used for residence or commercial development would be placed into productive use”

Third, we would pursue land ownership and productive use of Jamaica’s land.

The UIC believes that every Jamaican family should become property owners. Land ownership is one of the foundations of liberty, dignity, stability, and economic independence.

We would therefore seek to ensure that land is used in a way that benefits the Jamaican people. Land that is not being used for residence or commercial development would be placed into productive use, especially through organic farming and other sustainable industries. Our vision is for Jamaica to become the organic food capital of the world, with Jamaican citizens becoming shareholders and beneficiaries of the profits generated from its productive use.

“Jamaicans must stop waiting for rescue from the same system that has failed them. We must build and fund an alternative system of governance that serves the people’s best interests”

Is there anything else you want to say to our readers?

Bad governance affects all of us. When people remain silent while systems of power, political actors, and their private backers continue to misuse public authority and public resources, the people become trapped in their own oppression.

The UIC believes that Jamaicans must stop waiting for rescue from the same system that has failed them. We must build and fund an alternative system of governance that serves the people’s best interests and includes strong checks and balances to prevent the same abuses from recurring.

We invite Jamaicans at home and in the diaspora, as well as friends of liberty around the world, to pay attention to what is happening in Jamaica. Our struggle is not only about party politics. It is about liberty, responsibility, justice, opportunity, national dignity, and the right of a people to govern themselves properly.

How can people find out more about what the party is up to?

People can find out more about the United Independents’ Congress of Jamaica through the following platforms:

Website: www.uicjamaica.com
UIC Liberty TV: https://www.youtube.com/c/UICLIBERTYTV/videos
UIC Jamaica: https://www.youtube.com/@uicjamaicatv Twitter: https://www.twitter.com/UICJamaica
Tiktok: https://www.tiktok.com/@uicjamaica
Instagram: https://www.instagram.com/uicjamaica/
Email: info@uicjamaica.com

International Libertarians – Aurelio Ewijk of Democratic Alternative 1991 (DA’91) of Suriname

With a strong focus on anti-corruption policies, Democratic Alternative 1991 (DA’91) of Suriname was founded in 1991 when it split off from the National Party of Suriname.  The party is a member of International Alliance of Libertarian Parties.

“DA’91 was founded in 1991 based on the conviction that politics should be honest, substantive, future-oriented, and grounded in democratic principles”

Can you introduce yourself to our readers, and tell us a bit about your party?

Suriname

My name is Aurelio Ewijk and I serve as Chairman of the Youth Forum and a member of the Presidium within DA’91, a political party in Suriname that stands for democracy, transparency, good governance, and fair sustainable development. DA’91 was founded in 1991 based on the conviction that politics should be honest, substantive, future-oriented, and grounded in democratic principles.

We believe in a Suriname where opportunity, development, and justice are central for every citizen.

“We believe sustainable growth is only possible when citizens regain trust in their government”

What do you see as the major challenges facing Suriname and what policies is the party championing?

Suriname is currently facing several major challenges, including economic instability, a high cost of living, unemployment, corruption, and declining public trust in politics and political institutions. In addition, we believe that education, healthcare, and opportunities for young people deserve greater attention.

DA’91 therefore advocates for transparent governance, stronger state institutions, investments in education and entrepreneurship, and an economy that is less dependent solely on natural resources. We believe sustainable growth is only possible when citizens regain trust in their government.

“We believe in a stable economy in which local entrepreneurs are supported, bureaucracy is reduced, and investments are encouraged”

If you could introduce policies to change just 3 things in Suriname, what would they be?

  • Strengthening transparency and anti-corruption policies so that public resources genuinely benefit society.  We want to introduce stronger oversight mechanisms within government, make public spending more transparent, and strengthen independent institutions so corruption can be effectively addressed. Public resources should be used for the development of the country and not lost through mismanagement.
  • Investing more in education and youth development, because young people are the key to Suriname’s future.  DA’91 wants to invest in modern education, technical training, and digital skills so young people are better prepared for the labor market. We also believe young people should be given more opportunities to develop entrepreneurship and innovation.
  • Stimulating economic reforms that create more employment, support local entrepreneurs, and provide financial stability for families.  We believe in a stable economy in which local entrepreneurs are supported, bureaucracy is reduced, and investments are encouraged. The goal is to create more jobs, restore purchasing power, and provide families with greater financial security.

“Despite the challenges, we continue to believe in the strength, creativity, and resilience of our people”

Is there anything else you want to say to our readers?

Suriname is a country with enormous potential. Despite the challenges, we continue to believe in the strength, creativity, and resilience of our people. Political change begins with engaged citizens who are willing to think along and help build a better future.

With the prospect of billions in future oil and gas revenues, now more than ever is the time to implement radical reforms and ensure that our communities benefit from this economic opportunity.

How can people find out more about what the party is up to?

People can follow DA’91 through our social media channels and other online platforms where we share updates, positions, and activities.

Facebook: https://www.facebook.com/DA91politiektrafassi