Hungary Reform Adjusts to Realities

To heal the economy, the government tries Western-style taxes

Even in Hungary, the most reform-minded country in the Soviet bloc, a few cornerstones of Communism had long seemed inviolable. One was the absence of that onerous capitalist tool, income tax. Another was the rubber-stamping role of the Parliament in a system controlled by the Communist Party. By last week, all that had changed. In an unprecedented session in Budapest's Chamber of Deputies, impassioned legislators demanded, and often won, amendments to a controversial package of sweeping economic policies. At the core of the new legislation: Eastern Europe's first major personal income and value-added taxes. Said Richard Hirschler, an editor at the...

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