Read the text entitled "The case for flat taxes" in order to answer question:


Estonia's economy has grown impressively since its 1994 reform. Growth reached double digits in 1997, and has since settled at around 6% annually, after a slump at the turn of the century. Repealing its high tax rate on the rich did not erode the country's tax base as some might have feared. In 1993, general government revenues were 39.4% of the gross domestic product (GDP); in 2002, they were 39.6%. Estonia now plans to cut its fl at tax from 26% to 20% by 2007.

How much do Estonia's robust revenues owe to its fl at income tax? Perhaps less than is frequently advertised. In 1993, the year before its reform, Estonia's multiple personal income taxes raised revenues amounting to 8.2% of GDP. In 2002, its fl at income tax raised revenues worth just 7.2%. Indeed, the fl at income tax that generated so much excitement abroad seems to be carrying less weight than Estonia's old-fashioned value-added tax (VAT), which raised 9.4% of GDP in revenues in 2002.

VAT is, of course, the fl attest tax of all. It levies a uniform rate on the goods you buy, taking a constant cut of your money when it is spent as opposed to when it is earned. Estonia's VAT is also quite broad, leaving relatively few things out (hydropower and windpower were two curious exceptions).

The author mentions a slump in Estonia's growth at the turn of the century which characterizes