FLAT TAX….

The government sent the Duma a tax-reform package that includes a flat-rate income tax at 13 percent, a three-point cut in employers’ social-security contributions to 35.6 percent, and the replacement of a grab-bag of taxes for earmarked off-budget funds with a single “social tax.” The flat tax looks in good shape, with support from all major non-communist parties, but other proposals are in trouble. The “social tax” bill has already been pulled, in face of opposition from labor unions and the Communists. The total tax burden is unlikely to fall, and the government hopes better collection means revenues will rise. Excise taxes on gasoline have already risen sixfold, and taxes on tobacco have doubled.