Wed | Apr 26, 2017

Ronald Mason | Tax loot and shoot

Published:Sunday | March 19, 2017 | 3:00 AM

In a liberal democracy, the will of the people is sought because it comes with permission for social engineering. Social engineering encompasses the use of inducements to cause people to respond for their greater collective good. It thus becomes primary focused on those who have and use government power.

In Jamaica, the present government, in its campaign, made promises as to how it would engineer society. It would aggressively pursue crime reduction, education, and health care. The jury is still out on the progress it has made.

However, in the presentation of the 2017-18 Budget, the Holness administration has clearly signalled how the society is to be ordered. They seek to effect crime reduction by what they call human development. Some 6,300 persons, 100 from each constituency, are to be brought into a structured environment this year. The administration has been skimpy on details as to how these persons are to be identified and selected for this programme and how they will be paid.

The Government has sought to manipulate interest rate within the Students' Loan Bureau to affect outcomes. The preferred areas of study are incentivised with lower interest rates. Those who work while studying, that is, pay taxes while in school, are given the preferred incentive. We have not been told from where the resources will be found.

 

TAX POLICY

 

The continuation of no auxiliary fees for secondary schools now seems to be entrenched. The Jamaica Defence Force has been brought on board to train an additional 1,000 persons per year, but the tool most often utilised to achieve social engineering is tax policy.

The most recent tax-policy pronouncements do not appear to use the most potent tool. This, Mr Shaw, is NOT tax reform. The taxes announced are particularly targeted towards the motoring public, pensioners, small business operators, the working poor, and the unemployed.

The significant hike in the fuel tax, a 20 per cent hike in the licensing and related fees, the lowering of the tax threshold on electricity, and, of course, the tax on health insurance premiums are all targeted at persons with the least ability to resist. They are the captives. A look at the revenue source indicates they will be most directly requested to pay the bulk of the taxes. Transportation of goods and services will inevitably increase.

The consumer will be deluded into thinking that companies that operate as legal entities would be paying some of these taxes; they do not, people do. Customers and clients will ultimately pay.

In effect, Andrew Holness and Audley Shaw preferred to hold the country to ransom just to perpetuate a lie. They said there would be NO TAX to fund this wanton frolic. This is the second tax package to continue with this deleterious election lie.

Part of this social engineering was also anchored on a promise to double the minimum wage. The cruel part is that the minimum wage has not been hiked in line with that election promise. Income inequality has persisted without government intervention to engineer a more equitable society.

There has been much chatter about tax reform, about moving from direct taxation to indirect taxation. Dividends are tax-free items for the rich; we already have some indirect tax; some 67 per cent of our taxes is indirect.

The Holness tax policy means Jamaica no good. Give relief from the compulsory nature of the NHT tax (euphemistically termed a contribution), as all it has become is a new trough for politicians, sadly now both parties, into which they dip their sticky fingers. Large numbers of persons have to contribute but will never, ever be able to obtain a housing benefit. The seven years for the taxpayer to be refunded by NHT with minimal interest does not apply to the politician, as they have now taken to looting this money every year. The politicians continue to raid the coffers of the NHT.

 

PATHETIC STATEMENT

 

Free the people from this farce. To stand there and say the NHT is a financial institution and must be treated as such is a most pathetic statement born of sheer arrogance. The NHT was developed to provide housing solutions for citizens and it must be organised to deliver this.

Taxation without representation was the rallying cry for the American Revolution of 1775. We all know about the Morant Bay Rebellion of 1865. As long ago as that was, it might have been a precursor of what is to come?

This country is overtaxed and there is very little to be had by the average citizen for the tax they now pay. The education system delivers very, very poor results, year after year after year, and we now take pride in giving schoolchildren free lunch five days a week, but many of them really need it seven days a week. The public health-care system creaks and delivers service years after the health practitioners have determined that the patient requires assistance.

High levels of taxation cause low levels of production. Eliminate all payroll taxes. Let people determine how they spend their income. Let the choice be theirs and they will decide, but don't heavily tax all the essentials, which would disproportionately hurt the poor.

- Ronald Mason is an attorney-at-law and Supreme Court mediator. Email feedback to columns@gleanerjm.com and nationsagenda@gmail.com.