by Rod D. Martin
June 24, 2005

Ever wonder why so many Americans criticize Russia’s free market reforms?

Maybe it’s because they’re making us look bad.

Last week, Russia abolished the death tax. Yes, Russia: the land of the proletarian revolution, where the accumulation of wealth was itself abolished eighty years ago in a hail of bullets and blood. Acting on President Vladimir Putin’s proposal made just this April, the State Duma voted 414-2 not only to end the confiscatory taxation of inheritances, but also the gift tax to close relatives, something else more “enlightened” Americans have not quite managed to do.

This is just the latest in a string of truly earthshaking reforms enacted under Putin, perhaps the most dramatic of which is Russia’s July 26, 2000 adoption of a 13% flat tax. Besides wiping out crippling corruption in the tax collection system and doubling both compliance and receipts, Russia’s flat tax has produced significant economic growth in a land still staggering from the collective Communist hangover.

Russia isn’t alone in enacting a flat tax. Estonia and Latvia launched their now-booming economies with their own flat taxes in the early 1990s; Stockwell Day achieved the same thing in roaring Alberta during his tenure there. More recently, from Ukraine to Serbia, from Slovakia to Iraq, country after country that truly wants to jump-start its economy, liberate its people and throw off a heritage of wealth-sapping socialism has found tremendous success through enacting this one vital reform.

Russia isn’t alone in abolishing its death tax either. Earlier this year, Sweden — the ultimate cradle-to-grave “social democracy” — did the very same thing, recognizing at last the destruction caused by preventing parents from saving for their children.

The significance of this admission of socialism’s failure cannot be over-hyped. Russia, at least, has formally embraced markets; but Sweden renouncing the death tax is like Al Franken renouncing sarcasm. To buck the Swedes on this one, you’d just about have to be a Red Guard. Or Nancy Pelosi.

But I repeat myself.

The case against the death tax is overwhelming, and in poll after poll about 90% of Americans (Ms. Pelosi obviously excluded) agree with Mr. Putin that it ought be cast on the ash heap of history. In much the same vein, polling continues to show supermajorities for Social Security private accounts, which, thanks to an aging baby boomer population, is certainly the most vital issue of our time. Private accounts have been thoroughly tested both at home and abroad too, with astonishing success.

But again, this is a part of the story you are never quite allowed to hear. When will Peter Jennings tell you about Third World Chile, whose private accounts — enacted in the early 1980s — doubled that country’s economic growth rate for two decades and brought the average Chilean’s retirement up to U.S. standards? When will Christiane Amanpour acknowledge that, after just 19 years, Britain’s private accounts’ assets exceed all of Europe’s government pension funds combined? When will Harry Reid admit that an ever growing list of countries, from Australia to Argentina, from Hong Kong to Kazakhstan, are embracing some level of privatization, and all with better results than America’s crumbling Socialist Insecurity Ponzi scheme?

While we’re at it, when will George W. Bush — God bless his courage — confront Americans with that greatest of all dirty little secrets: that lots of Americans, including countless thousands of non-federal public employees, already have private accounts that blow Social Security away?

Take Galveston County, Texas for example. Since opting out of Social Security in 1981, the county’s guaranteed minimum annual return has averaged 6.5%; a 40 year old middle manager who might expect just over $1,000 per month from Social Security at retirement can look forward to five times that: $5,474 per month. And instead of Social Security’s pitiful $255 death benefit (not enough to buy a pine box!), Galveston’s workers’ families can look forward to life insurance of triple their pay, with a minimum of $50,000 all the way up to a maximum of $150,000.

Why is this amazing (and open) secret “dirty”? Simple: for the most part, the unions representing those lucky men and women who enjoy plans like this oppose private accounts for the rest of us. Leftist “true religion” trumps real world experience yet again.

Russia has shown us again this week: economic freedom is sweeping the world, with truly fantastic results. Likewise, the old Soviet Russia showed us the folly of state central planning.

So why is America among the last developed countries to “get it”?

It’s time to shake off the death grip of yesterday’s failed ideas. Democrats have lost the last umpteen elections for a reason. And Republicans will only consolidate real power — and a real future for every American — by pressing ahead with a solid agenda for real liberty and true reform.

It’s not one day too soon.