So over the past few days there has been quite a bit of talk in Jamaica about proposed tax measures. Specifically, the one that has the most people’s tongues wagging is a bank withdrawal tax. In response to this particular proposal, Jamaican entrepreneur Gordon Swaby posted a strident commentary entitled “The Jamaican Government’s withdrawal tax is anti-business, does not protect the poor and weakens the middle class”. MP Damion Crawford (Minister of State in the Ministry of Tourism and Entertainment) clearly disagreed: The Flaw I Found in Gordon Swaby’s Tax Analysis.
Now, I happen to have a friend with opinions, but without the twitter/facebook/blog platform of the above commentators. Thus, in the interest of keeping this lively debate going, I’ve offered to print her reply to MP Crawford here.
Hello Mr Crawford,
I was reluctant to respond to your response to Mr Swaby, because I’m not an economist. But then, neither are you, so we have something in common.
I think that’s where the commonalities end, however, as you will see from my comments.
First, your 9 assumptions: they easily create a false premise upon which to build your argument.
I take issue with your assumption that the only 2 ways for a government to raise funds are through taxation and increasing the taxpayer pool. Those are indeed very important but not the only options available.
Why don’t you curb government spending…on politicians? Here are some examples of cost-cutting measures:
Car pooling: this is the practice of French Ministers of Government. You will note that France is a much richer country than Jamaica. This would allow us to sell off many of the Toyota Prados – of course, we wouldn’t sell them for a song to the politicians who were previously being driven around in them, because that would be unethical…
Limiting the size of delegations on foreign trips: you already know the general public has a problem with this. Why not cut down to a bare minimum? There are few things that can replace a handshake, but Skype and other means of instant communication are increasingly considered valid alternatives.
Paring politicians’ salaries: Take a cut, and/or establish a wage freeze. Then you’d be just like the rest of us: most of us have had to endure one or the other.
These are 3 options that occur to me off the top of my head. You will note that I have thought outside of the taxation box. I can’t tell you how much money that would save – that’s an economist’s job. But why not have someone work that out? Have any of these (or similar) options been considered and quantified? Although I don’t think that would get us the $2b, it would put us on the way. And you wouldn’t have lost the trust and respect of the people you are ostensibly in power to serve in the process.
You see, these revenue-earning measures wouldn’t just earn revenue. They would earn the goodwill of the people, because we would truly feel like we are all in this together. If you wanted to be cynical about it, you could do this so that at a future date you could use that goodwill to do more stringent cuts (I do not approve of this cynicism). So far we feel like we are the only ones getting our belts tightened. And that belt is fast becoming a noose.
I think your use of the term “short term” needs clarification. Do you mean that we will only be subjected to this tax for a limited (short) time? That would be an important point to make. Especially because once taxes are imposed they are seldom rescinded.
How dare you say you are targeting those who can most afford it? I am now subject to a wage freeze, face a devalued dollar and will soon face a rise in utility charges. I can emphatically not afford this. And I am a relatively well off Jamaican.
A final plea, Mr Crawford: do not under any circumstances compare your pay cheque with ours. That just seems disingenuous. Everyone, including you and your colleagues, knows that your salaries far outweigh ours. This kind of comparison just gets us angrier and serves as further proof that you are completely out of touch.
It might be time to take the “people” out of the “People’s National Party”. Or, is this taxation proof that you already have? You have no idea what the people need or deserve or how we live our lives. Worse – you don’t seem to care.