Redstate

By Skanderbeg Posted in Archived — Comments (2) / Email this page » / Leave a comment »

Vladimir Putin - Authoritarian.

Yep.

We all know that. But fortunately he seems to be a somewhat lazy authoritarian, spending more time at his villa in Riviera-like Sochi than in cold Moscow. And he leads a weak country in demographic collapse. And "mighty" Russia is unable to work its will on any other country, except perhaps tiny, impoverished Moldova (although it looks like Vlad may gearing up to try his luck against Canada - which though larger and less-impoverished than Moldova, is about as weak).

However, there's another side of Vlad.

When it comes to economic policy, I'm reaching the point of outright jealousy - and almost get the sense that Vlad is a stealth member of the VRWC.

Consider the following three items.

One.

When the "flat-tax revolution" swept eastern Europe, Vlad knew a good thing when he saw it and hopped aboard. Russia adopted a flat 13% income tax rate, causing once-disdained flat-taxer Steve Forbes to trenchantly quip, "Who would have ever thought that on this issue I'd be outflanked on the right by a former KGB agent."

Besides the things we already know about the basic goodness of flat-taxes, one other interesting thing happened - Russian federal tax revenues soared. Why? With such a low and simple rate, it was both simpler and more lucrative to pay the tax rather than to avoid it - in other words, this brought the underground economy up to the surface since it was offered such a good deal. (One wonders if that kind of sensibility is still possible in Washington.)

Two.

This one is a bit more obscure, but it's been significant. Two or three years ago, the Russian ruble became - probably for the first time ever - a fully convertible currency. This allowed the ruble for the first time to find its own appropriate value in the international currency markets - making the ruble a hard currency.

Back in the Soviet days, the ruble was cut off from reality. When a visitor entered the Soviet Union, he was forced to exchange rubles at the "official" rate of something like 2.5 - 3.0 to the dollar. At the same time, the reality was reflected in the black market rate - which was more like 25 - 30.

So now the ruble is not play money, but real money. When I was in Russia about a year and a half ago (and not in Moscow, but in southern Russia), I was surprised to see that not only did the ATM in the hotel lobby offer English as a language - it even offered to dispense currency not only in Russian rubles but also in U.S. dollars!

Three.

And now we get to the new news, which comes from a speech that Vlad gave to the Duma about a week and a half ago.

The lead-in alone is eye-grabbing and jealousy-promoting:

Putin Program Calls for Tax Cuts

Shortly before being confirmed as prime minister, Vladimir Putin laid out an ambitious program of lower taxes and higher spending in the State Duma that cheered investors.

The "higher spending" is of course possible because Russia is presently rolling in petro-dollars - a high-class problem.

Further,

In Putin's 45-minute speech, occasionally interrupted by applause, he said he would work to bring inflation back to single digits "in the next few years" and pledged financial market reforms to ensure that Russia would become one of the world's major financial centers with a "large class of investors."

The country's legislation needs to be updated to bring about a level playing field in financial operations and the introduction of modern settlement systems on stock markets, Putin said.

(Emphasis mine.)

Apparently Vlad wants to develop the blackheddski class.

A couple of other highlight quotes:

"I believe that we need to decide on the strategy and tactics of further tax cuts no later than by August. [We must decide] when and by how much we need to cut taxes to create additional stimulus for economic development."

....

"The time has come to take a decision to reduce the tax burden on this sector to encourage oil production and refining growth."

Read those quotes two or three times, and then try to imagine how Nancy, Harry, Barack, et al. would react to them were they uttered over here by one of our own.

I don't know what's in the water (or maybe the tea) in the Kremlin, but maybe we should get some of it and start force-feeding it to the RNC et al.....