One of the more amusing aspects of the recent enlargement of the EU is the way in which some of the countries of ‘old Europe’ have objected to what they see as the disturbingly low tax rates of some of the union’s new members. Estonia, for example, has a flat tax and no corporate income tax. The real reason for this is worries about ‘unfair’ tax competition, but to make these objections seem a little more palatable, they are supposedly justified by the fact that these low rates are giving the new states on the back of the EU’s generosity. That’s nonsense: the subsidies that the newer countries receive are a function of their lower GDPs, not their budget deficits. Moreover, there is a certain irony in ‘old Europe’, a collection of countries, many of which built their welfare states on the back of low military budgets made possibly only by America’s willingness to pay for the defense of western Europe for decade after decade, now behaving in this manner