Bulgaria was just in the news, and not just for any reason, but because it just topped a “best in the world” list. According to a recent Wall Street Journal piece, “Expats looking to minimize their income-tax bill may want to pack up and move to Bulgaria.” According to the study quoted by the WSJ, expats in Bulgaria pay the lowest income and business tax rates in the world at just 10%.
They say that nothing’s inevitable but death and taxes, but at 10%, it barely stings. For comparison, we have to repatriate as much if not more back to the US, where we don’t even live. And yet we’re still blocked from using Netflix–that’s “democracy” for you! Local legend has it that the income tax rate sits at 10% since that’s the absolute maximum the government found that it could expect to collect. If the state demanded any more than that, and people would find some way to only pay 10%. It’s hard to verify a story like this, but since one university study values the total of Bulgaria’s untaxed shadow economy as almost 1/3 of the country’s GDP, it’s plausible.
One of the most refreshing things about living in Bulgaria is the sense of freedom. Sure, you see pregnant women smoking more often, but as Patrick Henry said, “give me low fetal birth weight or give me death. “That includes freedom from taxation–which a certain section of the voting spectrum treats as a paramount directive. America’s right-wing Heritage Foundation, for instance, just bumped up Bulgaria’s ranking on its “economic freedom index.” The even more right-wing Cato Institute chided Greece for reaping the whirlwind of being so much less free than Bulgaria.
To give an example of what a dream this is, when the US invaded Iraq, one of its first prerogatives was opening the country for business. The country’s proconsul, L. Paul Bremer enacted a series of laws to wipe the nation’s slate clean in favor of business. Iraq’s maximum corporate tax rate was set at 15%. Even with an invader presenting a conquered country as a gift to global business interests couldn’t meet Bulgaria’s sweet, almost-single digit tax rate.
Last year, Cato awarded Bulgaria its seemingly one-off “Balkan Prize,” declaring this country the happiest in the Balkans according to its high amounts of liberty. Despite a tax rate that makes American libertarians drool, though, Bulgaria is actually one of the unhappiest countries in the world. Evidently, low taxes aren’t all a country needs to be happy–but it is very nice.