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Scaremongering a simplistic argument against progressive taxation

Dear Editor,

Your editorial of July 20, 2018, in which you label calls by Sir William Allen and accountant Gowon Bowe for the introduction of an income tax as “class war rhetoric”, while entirely misguided, is at least helpful in that it helps channel the public discussion of such an important issue onto productive ground.

It is also helpful to those of us who support a more progressive tax regime that, while your editorial comments do not contain any cogent argument against income tax from the point of view of either fiscal policy or economic fairness, they do (by repeating them) expose the most transparently absurd arguments against it to the critical scrutiny that they deserve.

For the record, those of us who argue that the highest income groups in The Bahamas are (almost uniquely in the world) unreasonably spared their fair burden of fiscal responsibility, are not motivated by either Marxist ideology or personal envy (indeed, most of us would be included in those high income brackets of which we speak).

Rather, the motivating factor is nothing less than stark fiscal reality: The Bahamas collects far too little revenue relative to the size of its economy and it does so predominantly on the backs of the lowest income groups. That is unsustainable. It is also unfair and regressive. For the same reasons, all of the most advanced capitalist economies on earth feature taxes on personal and corporate income as the predominant form of revenue collection.

While your editorial jumps to the conclusion that an income tax could be up to 60 percent of personal income (such as is obtained in the most heavily taxed Scandinavian social democracies) it does not disclose (for context) that our nearest neighbor, the U.S., collects from 10 percent to 39 percent of personal income. At present, we stand at zero percent. Let’s be sensible and stop the scaremongering.

Sir William Allen, Gowon Bowe and economist Richard Coulson are right. Those of us who comprise the highest income groups should have no problem paying our fair share to sustain the development of the country that has afforded us the opportunity to live well.

In the coming years, as the simple fiscal facts hit home, it will be interesting to see how The Guardian and other defenders of the regressive status quo intend to counter the arguments of these highly respected commentators. If your editorial is any indication, then it is clear that the favored tactic will be simple, baseless scaremongering. You may even find politicians who you can scare into agreement with your thesis. But I think you will be surprised by the extent to which you have miscalculated the level of public awareness on this issue.

 

– Andrew Allen

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