Even though neighboring flat tax nations such as Slovakia are growing faster and creating more jobs, the labor movement in Prague is protesting reforms that would improve the Czech Republic's competitiveness. The International Herald Tribune reports on this self-destructive impulse:
Around 15,000 labor union members protested in downtown Prague Saturday against the government's proposed tax reforms and cuts in welfare spending. ...If approved, a 15-percent flat tax on personal income would be introduced in 2008. Currently, the personal tax rate ranges from 12 percent to 32 percent, depending on income. The corporate tax rate would be cut from 24 percent to 19 percent by 2010. The draft also includes cuts in social benefits, unemployment benefits, maternity leave payments and health care spending. The labor unions claimed that only the wealthy would benefit from the proposed changes.