Gordon Robinson | Taxed to death
Sometimes I wonder if we appreciate how much tax we actually pay and for what collective or personal benefit.
PAYE workers pay 25% (30% on earnings over $6m/annum) of taxable salary. What we can sometimes overlook - unless we carefully review our payslips - are the additional deductions (2.5% of total emoluments to NIS; 2.25% as Education tax; and 3% to NHT). So our intrepid PAYE worker finds at least 32.75% of his/her taxable salary separated at birth. Then he/she goes out into the world and pays another 11% of gross (16.5% of 67.5% left in the pay packet) as GCT.
It gets worse. If the frugal worker manages to save some 'what lef', Government gleefully slurps up 25% of any interest paid by his/her greedy banker, who has already extorted excessive 'fees' (plus GCT) for putting your money in a teller's drawer (or cashing your NIS pension cheque). By this time, our glassy-eyed PAYE worker ends up paying almost 50% of weakly (pun intended) sweat and tears to Government. Self-employed hacks pay over 50%, and companies pay 33.3% profits tax, plus matching contributions to the rest. In addition, companies are put to administrative cost as Government's tax collector for free as they must deduct these payroll taxes from employees' salary for remission to Government.
It's in this context that we should consider the feasibility of 2017-18 budgetary estimates that predict a massive increase in collections of 'old taxes', PLUS $14b in new taxes from the empty pockets of beat-up taxpayers already raped to the tune of 50%+ of their earnings. Also, before we roll over, wiggle our legs in the air, and apply Vaseline, we should carefully review what we're receiving in return for these taxes.
1. Income tax: This is the most egregious of all taxation because it literally represents Government picking the pockets of the poor to fund its operations while the wealthy and connected get away with murder. It's well known that Jamaica nurtures and nourishes flourishing underground economies (including a vast religious economic macrocosm) from which not a penny of tax is collected.
Income taxes should ensure that Government can provide, inter alia, educational, health, security, and infrastructural services. The philosophy underpinning this agreed pickpocketing exercise is that if taxpayers are prepared to utilise public-health services or public educational services, the additional expense should be as close to zero as makes no difference. Furthermore, infrastructural improvements should come with ongoing maintenance, so, for example, minefield-like potholes don't put harried taxpayers to unnecessary additional expense out of the 50% of salary he/she's permitted to keep, and modern, efficient, effective security forces should keep taxpayers safe.
Bottom line: We pay taxes to ensure we can spend the rest of our earnings as we like and not to repeat spend on things our taxes should be funding in full.
The premature abolition of hospital 'user fees' results in a broken-down public health system exemplified by the Cornwall Regional fiasco. Long before that particular kerfuffle, I was again prophetic when I wrote on January 29 ('The truth about leadership'):
"Leaders, tell us the truth about health care. Jamaica's health minister can make love to a camera better than Gary Cooper at high noon but only to broadcast babbling platitudes. Want to know the TRUTH? None of our public hospitals deserves the designation. All should be closed down for causing more disease than they cure."
Interior road surfaces destroy our ancient cars and eliminate taxis from participating. Key infrastructure is neglected until it becomes dangerous.
The JCF is so corrupt that no 'crime plan' can succeed or even be fairly assessed. CISOCA declared that the majority of high-profile perpetrators of alleged sexual intercourse involving underage persons were pastors and policemen.
Jamaica's education system focuses on standardised tests and cramming students through narrow tunnels to graduation like cattle with foot-and-mouth disease.
2. Education Tax: This 'dedicated tax', introduced with much fanfare for the express purpose of improving education, has instead been unceremoniously dumped in the Consolidated Fund with the same 'benefit' to taxpayers as income tax. No MP condemns this pusillanimous pilfering of taxpayers' earnings.
3. NIS: Miserly NIS pensions give senior citizens no social security. The delays in starting pension payments and the trouble seniors endure to collect make matters worse. Then seniors try to lodge their pension cheques in a bank that charges them twice the cheque's value (+ GCT).
4. NHT: This must be the Guy Lombardo Show! Created to provide low-cost housing solutions for the poor, the 'Trust' has proven most untrustworthy. When it isn't bailing out party hacks ('Outameni'), it's meekly handing over its surplus funds to central government for 'fiscal consolidation'. Bah, humbug!
All this is why one of the worst things done by this Government is the pernicious gas tax imposed on Thursday by Audley 'Are You' Shaw. Another was lowering the threshold for GCT on electricity. We know what this means. Deceptive devices like boasting 61% of JPS customers still fall below the threshold are cruel and unworthy.
No taxpayer can avoid this gas-electricity tax hike combo. If you don't drive, you must take buses or taxis, whose fares are about to shoot up commensurate with their increased petrol expenditure. If you decide to 'walk foot', you'll still buy bread, patty, yam, or flour, which will all be affected by increased transportation or electricity costs. Every business falls above the electricity threshold and must also pay the gas tax. Every business will pass along its increased expenditures to its customers. Tell us the truth, Audley.
All this is why one of the best things done by this Government was the significant increase in the income tax threshold to $1.5 million. This makes a real difference in people's disposable income. It's more than regrettable that the tax relief is given by the right hand and retrieved by the left, but Government does have a point that, at least, the additional taxation imposed to pay for '1.5' affects discretionary spending rather than coming directly from salaries.
Although this isn't what was promised, it's a reasonable compromise in all the circumstances, and one can easily read between the lines to see why it became necessary.
Speaking of reading brings me to Booklist Boyne's latest flight of fantasy. Either completely failing to comprehend my meaning or maliciously misrepresenting it, Booklist commented obliquely on my column on Vybz, suggesting that I supported Kartel's apparent ability to corrupt the prison system. Exposing himself as either a devout dunce or an incorrigible illiterate, Booklist wrote: "A silly comparison is made with Oku Onuora, who was allowed to do his poetry and to perform outside of prison as part of Manley's progressive prisoner rehabilitation programme in the 1970s. That was not done secretly. It was a part of government policy."
Really, Booklist? Seriously? I strongly recommend a course of JAMAL classes followed by a reread of my column when you'll discover I said EXACTYLY THAT. Oku Onuora, who I used as an example of creative work pursued while imprisoned, did so (in the main) within the rules, unlike Kartel, who appears to be breaking the rules.
THIS is what I wrote:
"There's nothing wrong with any artiste producing while in prison if it can be done within the rules. The 1970s dub poet Oku Onuora (born Orlando Wong) wrote while serving a 15-year sentence for armed robbery. In 1974, he was permitted by prison authorities to read his poetry with Cedric 'Im' Brooks' Light of Saba band performing in the prison. Afterwards, his work had to be smuggled out of prison (labelled 'subversive'). By 1976, all was forgiven and he won three prizes in the Jamaica Literary Festival. In 1977, he was allowed to perform in public at Tom Redcam library.
"If Kartel has corrupted the prison system to make this music, he should be convicted and sentenced along with prison officers found helping him.
"Any music produced by this method should be withdrawn from all aspects of the market. The fundamental characteristic of a prison sentence is that it's decided by a judge, not the convict. Also, it's meant to restrict the convict's freedom. Why should Vybz be free to bend prison rules as he likes while police hunt down robot taxis and strip off their tints?"
C'mon, Booklist! There are no multisyllabic words used. What REALLY is your problem?
Peace and love.
- Gordon Robinson is an attorney-at-law. Email feedback to email@example.com.