Letters

Why we need income tax

Dear Editor,

There are 15 countries in the world that deem it unnecessary to levy a progressive personal or corporate income tax.

Of these, four are Mediterranean and Caribbean colonies with populations under 100,000 and budgets funded entirely by the offshore financial services that dominate them; three are oceanic pacific microstates with no internal wealth to tax; and six are major oil exporters that fund their budgets entirely from oil revenues.

The other two (which share none of these features) are The Bahamas and Somalia.

Somalia has the excuse of being a failed state that lacks the infrastructure (and presumably the Kalashnikovs) to collect an income tax, even if it could achieve consensus on the issue among its various warlords.

The Bahamas’ excuse is that it is run by politicians so dimwitted that they believe that a tax system that makes poorer Bahamians pay the bills for wealthier Bahamians somehow attracts foreign investors (whose income is taxed in their home countries and would therefore not be affected by a Bahamian income tax).

At least, that is the pretext that FNM ministers use to justify the most regressive tax system in the Western Hemisphere. The most recent was Kwasi Thompson, who bravely drew a line in the sand on the issue of income tax when pressed on the 279 percent deficit increase that his government has allowed to accrue on the backs of Bahamians.

The reality, however, is that while the FNM’s funders clearly benefit from having their wealth subsidized by poor and middle-class taxpayers, the country’s economy does not.

In fact, it is done immense harm, both in that local demand is dampened by high taxes on consumption and in that the resultant narrow revenue base stunts investments in education, infrastructure and all the other things that support a modern economy.

There is no more important issue facing The Bahamas today than the need to quickly replace our regressive, consumer-focused tax regime with one dominated by progressive taxes on high incomes and luxury properties. Everything else is a distraction that will only prolong and compound the harm endured by our society until it is addressed.

Andrew Allen

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