Heresy on the Continent

During the past two weeks, tax reform became the centerpiece of government reorganization in the now-heretic countries of the Czech Republic and . . . France.

In the Czech Republic,

The Finance Ministry has been asked to draft by next year a new law on income tax that should be part of the second stage of the public finance reform and enter into force in 2010 at the latest, Finance Minister Miroslav Kalousek said after the cabinet meeting today.

Within the reform, the government plans a flat income tax at 15 percent that would be calculated from a "super gross wage" that includes social and health insurance.

But it gets even better.

Lower VAT is to be raised from 5 to 9 percent. Corporate tax is to be decreased from the 24 to 19 percent by 2010.

The government accepted the Greens' demand that households using gas for heating should be exempt from the environmental tax.

The tax will also not apply to the combined production of electricity and heat for household heating.

The tax changes are expected to simplify the business environment and reduce the tax burden on small businesses.

The minimum tax introduced in 2004 is to be cancelled and so are the monitored cash registers which businesses were to start using since January 2008.

Not surprisingly, such reform measures are vehemently opposed by the Social Democrats (CSSD) and the Communist Party of Bohemia and Moravia (KSCM).

In France, the government of newly elected President Nikolas Sarkozy has wasted no time in acting on the president's agenda of reforming . . . France.

French Prime Minister Francois Fillon said on Wednesday his government aimed to boost French growth to 3.0 percent using tax reforms to "shock" the economy into a faster track.

"We are going to propose a set of fiscal and financial measures designed to bring about a shock that will create growth," he told French radio Europe 1.

One of the more significant reforms will be to

. . . put a 50-percent cap on overall individual taxation.

Sarkozy's electoral triumph has been described by French historian Max Gallo, as a Victory of Reality over Utopia.

The ideology of the left, which has influenced, if not dominated, public and intellectual life in France since World War II, is in a deep crisis. Marxism ended long ago, and yet the French socialists haven't discovered any new answers.

Meanwhile, our Cousins across the Pond are also engaged in tax reform.

The government will push ahead with its much-maligned road pricing policy this week when it publishes proposals for pay-as-you-drive trials.

A draft version of the road transport bill will give local authorities the power to introduce road pricing in towns and cities. Ten areas in England considering schemes include Manchester and Birmingham, although ministers say a national scheme is at least a decade away.

And here's the jaw-dropper:

The local schemes are seen as a precursor to a UK-wide network that would track the movement of cars by satellite or roadside gantries, charging about £1.30 a mile on the busiest roads.

At current exchange rates, £1 equals two bucks.

The potentially radical reforms were attacked by motoring groups and the voluntary sector and even alarmed the Church of England.

Details emerged as the Government prepares to introduce a Bill allowing for road pricing pilot schemes in several parts of the country.

At present, anyone who is reimbursed for using their own car is entitled to claim 40p a mile for the first 10,000 miles without facing tax. After that anything paid over 25p a mile is subject to both tax and national insurance.

Revenue and Customs confirmed that the tax penalty would apply to those using their own cars for work.

And that would be on top of UK gasoline prices, currently about $7.44 per gallon (£3.75).