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Death, debt and taxes

Published:Sunday | April 8, 2012 | 12:00 AM

Lambert Brown, Contributor

The Gleaner, in its editorial, called on Prime Minister Portia Simpson Miller to follow the example of a former Greek Prime Minister George Papandreou in selling austerity measures to the Jamaican population. The fact that Papandreou committed political suicide is not mentioned by the editorial writer.

On the same day as The Gleaner's editorial, a 77-year-old Greek pensioner committed suicide outside the Parliament in Athens. His parting words were: "This is a dignified end before I have to start scrounging food from the trash". For this retired pharmacist, it was death before dishonour. Just before pulling the trigger to end his life he shouted: "So I won't have to leave any debt to my children". His is not the only suicide attributed to the austerity measures in Greece. In the last two years of austerity, the rate of suicide has increased 40 per cent. Those who are quick to recommend Greek-like approaches and solutions to the current economic crisis facing Jamaica need to understand the consequences of their proposals.

Reducing the debt burden

The fact that Jamaica has a major debt problem which must be reduced as a percentage of all the goods and services we produce is beyond question. One way to reduce the debt burden is by increasing taxes and or cutting budgetary expenditure. Another way is to produce more, grow the economy and thus reducing the debt as a percentage of gross domestic product. A third way is to do a combination of both approaches.

What also is beyond question is that there are thousands of Jamaicans who are not paying their fair share of taxes. What also is beyond question is that a lot of wealthy people are receiving billions of dollars in tax waivers. It would seem that the prudent approach to tackling the economic crisis facing our country is to start by demanding that those not paying their fair share of taxes do so. Second, it is time to end the waivers to the wealthy. The Jamaica Manufacturers' Association and some others in the Private Sector Working Group on tax reform say they support an end to the waivers. There are reports that there were months when the former Government granted more in waivers than actual tax revenue collected in those months.

The International Monetary Fund (IMF) has demanded that the waiver system be abandoned, so now we are seeing tax-reform proposals aimed at trying to recover the fruits of the waivers by other measures such as reduction of taxes on profit and increasing the burdens of General Consumption Taxes (GCT) on the backs of the poorer sections of society.

It is this three-card-trick that some people are trying to get Prime Minister Portia Simpson Miller to spend political capital to sell to the people, who have reposed their trust and hope in her and her government. It is not at all surprising that many of those who are now calling on Portia Simpson Miller to spend her political capital has spent most of their time opposing her. The Greek prime minister, George Papandreou, had to resign after selling the austerity measures. The lives of his people have got so awful that death became a better alternative to living for hundreds of Greek citizens. This is a course that the Jamaican people should resist. This is a trap that the most popular political leader in Jamaica should avoid.

The working and the middle classes have always been the ones making the sacrifices in Jamaica. It is time that the burden of taxation is shared in ways that don't drive the masses to suicide or scrounging in the trash for survival. In England, the deputy prime minister has mooted a tax on tycoons. The tycoons, he said, usually hire "an army of accountants and lawyers" to help them avoid taxes. In the City of Nottingham, they are placing tax on private parking spaces as a means of reducing congestion in their city. It is clear, therefore, that creative ways can be found to tax those who can better afford to pay than the old lady who needs her cornmeal porridge just to stay alive.

In this time of economic emergency, the wealthy need to make their fair share of contribution, too. In the past, the working people accepted wage guidelines, wage freeze, reduction of benefits, price increases, tax increases, lay-offs and redundancies, while the wealthy got tax waivers, fantastic profit margins, reduction in tax rates on luxury cars and land transactions.

Tax the rich

If The Gleaner editorial writer on Wednesday is correct that $13 billion in new taxes is necessary to plug the current shortfall in revenue and to be able to consummate an IMF agreement, then those earning billions in profit and those earning 10 million and over must be called on to pay much more taxes. A progressive system of taxation as applies in the United States and United Kingdom, among other countries, must be applied in Jamaica. There is no reason why the lowly paid workers such as a police constable or a nurse should be paying the same percentage of taxes on their income like the big banker with his tens of million in salary and bonuses. There is no reason why the big fancy houses should be taxed on the unimproved value. The lifestyle of the rich seems inverse to the amount of taxes they pay, while taxes on the poorer classes accounts for a larger percentage of their earnings. Suggestions that broadening the GCT to make the poor pay taxes on the basic foods is really a means of taxing the wealthy are ludicrous. It borders on dishonesty. The death of the Greek pensioner should cause us in Jamaica to take sleep and mark death. Enough is enough; it is time to balance the lives of our people by making those who can afford to pay their fair share do so.

Lambert Brown is president of the University and Allied Workers Union and can be contacted at