David Storobin, Esq
The Flat Tax Revolution in Eastern Europe presents a challenge to Western Europe, as companies are bound to move to neighboring states to avoid paying the near-confiscatory taxation (especially when you combine the income tax with corporate, capital gains and dividend taxes) levied in the “Old Europe” to support the Welfare State system. Furthermore, whereas hiring an employee in the Old Europe more closely resembles a Catholic wedding, where no divorce is possible except in the most extreme cases (and even then, companies face union strikes and negative media attention), in the formerly Communist states, one can hire an employee without the fear of being stuck with someone who’s incompetent, lazy, unqualified (e.g., lied in the resume about qualifications) or simply obsolete. Western Europe shutters at the thought of a person being obsolete (and, naturally, nobody in the Old Europe is lazy or incompetent), but if a business can replace a person with a computer that can produce more in less time and with less expense, it becomes a necessity in order to keep up with the competition (imagine a horse-and-buggy mail delivery business competing with a business providing emailing and faxing services). Likewise, if your competitor can save costs by operating in a country with lower taxation, they will be able to price their goods cheaper, thus forcing you to either lose your profit margin, go out of business or move to a place that will allow you to compete on a level playing field.
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