The Bahamas Weekly Facebook The Bahamas Weekly Twitter
Columns Last Updated: Jun 20, 2014 - 5:05:44 PM


Entrepreneurs add the value, Governments take taxes
By Rick Lowe, www.weblogbahamas.com
Mar 7, 2013 - 1:31:47 PM

Email this article
 Printer friendly page

In 2003 public (government) revenue was projected to be $901 million dollars, with expenditures of $1.1 billion. Fast forwarding to 2012, if my figures are correct, it looks like revenue was projected at $1.5 billion and expenditures at $1.7 billion.

In other words in about ten years we've seen almost a doubling of government expenditures and a projected increase in revenue of only about 50%.

Obviously the numbers don't add up. Deficits and borrowing have been the order of the day for decades now.

Sure the Minister of Finance recently indicated they would get serious about cutting spending and I'm hopeful but not confident that we will see significant reductions in government spending. The recent "uprising" at the College of The Bahamas when they were advised their budget would be cut is one reason why I don't think they will materialise. Once governments grant favours to some at the expense of "everyone", a complete economic collapse (à la Greece) seems to be the only way to reduce them.

The recent "debate" over budget cuts both here at home and in the US are eye openers. Heck one US Representative indicated a 3% cut in the US Government budget would lead to a loss of 170 million jobs (mind you it's estimated there are only 135 million workers in the US). It was simply an attempt to convince (read frighten) citizens that the proposed cuts are draconian.

Meanwhile the private sector has had to cut costs where possible to stay afloat for years now.

So governments primary answer is to find more tax revenue, not significantly decrease spending.

And now the nation is told a Value Added Tax (VAT) will be introduced in 2014 because the tax base needs to be broadened. We hear government officials, and others, explaining that the professional classes are not taxed so a VAT is how to do it. Of course the consumer will simply pay more for goods and services.

In other words, those workers and citizens that have had to cut back on their standard of living to make ends meet will have to pay even more.

Obviously taxes do not add value, so the only thing a value added tax could mean is entrepreneurs create the value and governments take taxes.

I'm reminded of this quote from US Chief Justice John Marshall:

"The power to tax involves the power to destroy;...the power to destroy may defeat and render useless the power to create...."

Yours in Liberty,
Rick Lowe

Bookmark and Share


© Copyright 2013 by thebahamasweekly.com

Top of Page

Columns
Latest Headlines
This Week in The Bahamas Commentary by Elcott Coleby: Oct 20 - 24
Italian girls gone bad: Miu Miu Spring Summer 2015
A Family Mission Statement
Pam Burnside: Where is our spunk?
Fred Smith: Bahamians are last on PLP list of priorities
Easier & Faster Travel for Canadian Brides to Bahamas Destination Wedding
Four Former Bahamas Governor Generals to speak at Historical Society
What are we doing in The Caribbean? Productivity vs. Busyness
This Week in The Bahamas Commentary by Elcott Coleby: Oct 13 - 17
(Audio) Land prices in The Bahamas: Thinking about the issues and possibilities.
Plea to Bahamas Ministry of Health pertaining to Ebola
The Police Pop Band at Grand Bahama Socials
Grand Bahama 'Basic Birding Class' set for November 1st
This Week in The Bahamas Commentary by Elcott Coleby: Oct 6th - 10th
Mistakes Parents make with Teen Discipline
What is your Company's Pandemic Policy? Maybe you already have one…
Potentially Toxic GAS, "Giant African Snail"
Sales Savvy
Pamela Burnside: Sun, Sand & Sea is Stale
Pamela Burnside: Protect our Bahamian Businesses
Pam Burnside: Confusion Reigns 1 - The 'Green Holes' of Debt
Sharon Turner: You Want Things to Change and Get Better? Unlearn Wrongdoing
(Audio) Crime pays, but costs the society a great deal!
Teaching your children delayed gratification
How to ask for a raise during seemingly tough economic times
(Audio) What has The Bahamas done post economic crisis?
This Week in The Bahamas Commentary by Elcott Coleby: Bahamas at UN, CBSI Meeting, Sustainable Oceans Speech...
Talking Tips for Educators
Moody's has The Bahamas in a mellow mood
Green Embassy captivates with eco-couture fashions
Fatherlessness, the Social Ills of Society
"Rollins: Ignorance or Arrogance?!"
"Bahamas VAT System - Triumphs and Pitfalls" (Part 2)
Rev. Terrence Jones' formal petition to PM Christie against VAT
Birding at Grand Bahama's "Delightful Dump"
This Week in The Bahamas Commentary by Elcott Coleby: CBTUC strike - Gaming Bill debate intensifies
Subconscious communication
Kirkland Bodie pertaining to Bahamas Junkanoo Carnival: Thanks???
Bahamas Most Popular Weddings & Honeymoon Destinations for Canadian
Dr. Brian Blower (Chiropractor) is ready to assist you with your back pain and your overall health