Premier Brown’s remarks with regards to tax cuts are disappointing. While I have my criticisms of the UBP’s plan, the PLP’s position lacks sense and employs very sad rhetoric.
“We came to the conclusion that blanket, across-the-board payroll tax relief for everyone is a bad idea.”
Right, tax cuts are ‘unwise’ in the face of more useful initiatives such as fancy trips abroad, un-hindered expense accounts and GP cars.
“Considering the current plight of our families, it is impractical, unaffordable, and unwise to give the same tax cut to a 19-year-old making $40,000 while living with her wealthy parents, as we give to a Bermudian mother-of-four making $40,000 living in a rental apartment.”
Here’s the thing. Life is about making choices, good and bad choices. I love how “wealthy parents” is used to describe someone with no children still living with their parents and “Bermudian” is applied to the mother-of-four.
Very easily, both could come from the same family, rich or poor, and both could be Bermudian.
The 19 year old is an example of someone making good life choices. Rather than running out, getting her own place and getting pregnant under an income in which she couldn’t sustain children, she’s living with her parents and likely saving her money before starting a family.
Contrast that to the mother-of-four who made the decision to have four more children than she could afford, who is living in a rental apartment.
So here we have two people, one who is making good life choices, another who has made some poor life choices, repeatedly. Since both are under the reasonable income level, should both be rewarded with a tax cut or just one?
Premier Brown’s suggestion is that we should reward the bad behavior and punish the good, because the 19 year old doesn’t deserve a tax cut because she has made good life choices. Even though she may well be Bermudian, may not have wealthy parents and may be reasonably saving all she can to one day afford a home, she doesn’t deserve a break despite the fact that she’s also earning a less than reasonable income. The mother-of-four is the one who deserves all the breaks despite not having learned that she cannot afford anymore children after the first or even the second child.
Perhaps Premier Brown should think of that Bermudian mother-of-four struggling to sustain herself the next time he jets off to some exotic destination like Dubai or China on the public dollar.
Recognize also that the rhetoric implies, or states “Bermudian” as an important factor in determining who benefits from a number of the “free” services proposals. Bermuda is a society comprised of Bermudian and non-Bermudian residents who all pay taxes, some more than others relevant to their income and expenditure. A country should consider all of its tax contributing residents when it devises its services. Also, I beleive the “free” daycare was going to require means testing to judge who can access the care – that effectively creates a barrier to access the service – if your child uses the services you are telling your community that you are too poor to pay your own way – that is a barrier that would prevent many people from wanting to use it.
Finally, I believe I heard from Premier Brown that “FutureCare” will be paid for by contributions from Employees and Employers – sounds like more salary deductions to me.
I find the whole Bermudian vs. non-Bermudian argument quite humorous. I can’t think of ANY country that has both a large expatriate population AND also gives them the right to vote… that would be insane. It’s weird how so many people come to Bermuda and are upset that they can’t vote “even though they pay taxes.” However, these people fail to mention that they can still vote in their home country… so what do they want… do they want to be able to vote in two countries? Whenever I go to the U.S. or Canada, I pay taxes on my purchases… should I get to vote there? Believe it or not, most of the taxes you pay in Bermuda are through your purchases.
As for your poor vs. rich argument, here’s my take on it. Isn’t the UBP’s idea also rewarding bad behaviour? Here’s a fundamental question: why should you get a tax break simply because you make less than $42,000? Isn’t it likely that someone who earns $42,000 makes that much because of ‘poor decisions’ (I prefer ‘poor circumstances’ for some). Why should you be punished (i.e. taxed) just because you made good decisions, went to school, got a good job and now you make $50,000+? Isn’t the UBP doing exactly what you accuse the PLP of doing? I guess you don’t see that.
Don’t you think that, based on her circumstances, the mother-of-four NEEDS the tax break? The 19-year-old doesn’t NEED the tax break, but they probably do WANT it. Herein lies an important difference and is a good reason why the cuts shouldn’t be for everyone.
As for Albertha Waite’s stunt on TV, did you see how many groceries she was able to buy with $50? Where does she shop at?… because I know it’s not at The Market Place!
What that “Bermudian” mother of four needs is the father of her children to be in her life and help provide for those children.
Bermuda doesn’t have too many children, it has too many fathers, and no tax break is going to allieve that.
Bermudian,
In all other countries you can just fill out a form when you leave and get back all the taxes you paid there. Even if you live there, you can generally get taxes back on the first 6 months of staying.
“In all other countries you can just fill out a form when you leave and get back all the taxes you paid there. Even if you live there, you can generally get taxes back on the first 6 months of staying.”
I don’t know about anywhere else but you can’t in Canada anymore. The visitor’s GST/HST rebate program was cancelled as of April 1, 2007.
Bermudian,
Perhaps you missed the first sentence of the article where i stated that I have my criticisms of the UBP’s tax cut which I noted in a previous article.
https://www.21square.com/2007/11/a-fair-tax-cut.html
In it I specifically did cover that I’d prefer no tax cut and a rebate across the board as opposed to specialized tax cuts just for those making under $40,000.
Correction: Second sentence
I think the spirit of the tax cut is honourable – put more money in the pockets of those who really NEED it (ie. for clothes/food/shelter).
However, as has been pointed out, just because an individual earns < $42,000 a year, does not necessarily mean they NEED the money. Dr Brown's example of the 19 year-old living at home is valid as is the ex-pat worker who is already sending lots of money to his homeland as it is (even without proposed the tax cut).
I think it is also wrong to assume that the single mother of 4 has automatically made bad choices in her life to get to where she is. Maybe she did make bad choices but perhaps the father is deceased, incarcerated or is just a deadbeat? Sure, she made the choice to have children with him but at that time did she know he was going to die, go to jail or become a deadbeat? I doubt it.
Overall, I think the tax cut will help those who need it most and if it helps out the 19 year-old living at home with his parents or the ex-pat washing dishes for $25,000 a year, is that really a bad thing?
JP,
Some people will benefit more than others from the tax cut, but how do you ensure those who actually need it get it?
Do you create mounds of beurocracy just to narrow down those who need support from those who don’t, in the process wasting a great deal of time and money, or do you look for an easier solution?
My feeling is that by giving everyone a rebate they can use, you put in place the least amount of beurocracy while giving everyone a fair shake. This includes people who aren’t working like the homeless, the elderly and the injured, who may well get nothing from such a tax cut but may be desperately in need of some assistance.
tilti, I guess Mike took care of your comment to me already.
Denis, like JP said, the tax cut is good in spirit. Mounds of bureaucracy do not have to be created to administer such a program. You will see that those who need the assistance are more inclined to ask for (and receive) it.
I do not think that someone like myself (who earns over $42,000) needs the tax cut and I am even willing to forego such a cut if those who need it the most ultimately benefit from it.
Bermudian,
As I’ve suggested, though you may not need the tax cut, there are those who might who arn’t making much money.
Personally I don’t see great value in rewarding someone who makes $42,000 far better than someone who making $20,000, and punishing someone who makes $43,000. I do agree with the spirit of it, but I’m not vastly fond of the way it is structured.
As someone who also earns over $42,000, a flat rebate isn’t about giving me a tax cut, it’s about ensuring fairness across the board.
I would even support a rise in the duty tax rate to raise the flat rebate given to all. This way the rebate is distributed fairly amongst all and only those who consume more are taxed more.