Bulgarian Socialists Invoke Alice in Wonderland in Flat Tax Debate

Finance | September 25, 2010, Saturday // 15:33|  views

Rumen Ovcharov (left) during Saturday's plenum of the BSP in which he slammed the party's idea to restore the progressive taxation in Bulgaria. Photo by BGNES

Bulgaria's opposition Socialists have fallen out in bitter debate over a draft document proposing the elimination of the flat income and corporate tax rates.

The National Council of the Bulgarian Socialist Party is holding a plenum Saturday to discuss its draft for an economic and social strategy entitled "Bulgaria 2020 – an European Welfare State," authored by Georgi Pirinski.

The document contains a proposal to do away with Bulgaria's 10% flat rate of income and corporate taxes introduced in 2008 by the Socialist-led government of Sergey Stanishev. The BSP leader Stanishev himself backed the idea in the draft – which is to abolish the flat tax within a couple of years if certain economic and administrative conditions become present.

However, Rumen Ovcharov, Deputy Chair of the BSP and leader of the Sofia organization of the party, has slammed vigorously the idea to revoke the flat rate and to restore the progressive tax.

Ovcharov went as far as using a quote from "Alice in Wonderland" (which was incorrect deliberately or not) in order to criticize the draft welfare state strategy.

"If you don't know where you are going, there is no way you can get there," he told the plenum of the Socialists.

"We are practically creating an alternative of the policies of our own government from a year ago. We are thus going to back to some worm-eaten postulates, lost in time. We should succumb to old dogmas because this is very dangerous for the party," declared Ovcharov with respect to the progressive tax idea.

Ovcharov himself was a Minister of Economy and Energy in the Stanishev government in 2005-2007 but resigned over a corruption scandal at the Sofia heating utility Toplofikatsiya.

Another outspoken critic of the mainstream Socialist leadership, however, law professor Georgi Bliznashki, defended the 2020 Strategy while also slamming the party for not being strong enough.

In his words, there was no way to create a welfare state without progressive taxation.

"I recently talked to European socialists who expressed their dismay at how a socialist party can introduce a flat tax. We are imitating post-communist Russia but without having its resources," Bliznashki declared.

He further accused the Socialists of "falling to the level" of Prime Minister Boyko Borisov.

"We are talking in Boyko's language, and that is why we are weak in Parliament. Borisov is a mediocre orator," he said.

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Tags: Rumen Ovcharov, Georgi Bliznashki, BSP, Bulgarian Socialist Party, Sergey Stanishev, flat tax, progressive tax, welfare, Georgi Pirinski, Alice in Wonderland


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