[xml][/xml]
The Bahamas Weekly Facebook The Bahamas Weekly Twitter
Columns Last Updated: May 7, 2015 - 7:57:38 AM


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

Email this article
 Mobile 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

Receive our Top Stories



Preview | Powered by CommandBlast

Columns
Latest Headlines
Fred Smith: Why are we so hateful?
This week in the Bahamas Commentary by Elcott Coleby: August 24 - 28
Versace Couture: Romantic and Oh So Sexy
Fred Smith QC: Mitchell and The PLP's Final Solution to The Haitian Problem, "Documents"
Attorney General Allyson Maynard Gibson on Sir Albert Miller
This week in the Bahamas Commentary by Elcott Coleby: August 17 - 21
Kirkland 'KB' Bodie to PM: Did I Hit a Nerve?
Huge price reduction on large canal front town home in gated community on Grand Bahama
Saving the world never goes out of style
This week in the Bahamas Commentary by Elcott Coleby: August 10-14
Kareem Mortimer: An interview with Bahamian filmmaker Maria Govan
A Treasure from Sweetings Cay
This week in the Bahamas Commentary by Elcott Coleby: August 4 - 7
Nassau Over The Hill - Documentary and Spy
Swimwear just got a whole lot sexier!
Your weekly horoscope for August 7-14
Reflections on Freeport, the “Magic City” as it turns sixty - Commentary by Elcott Coleby
Bahamas Independence Celebrations and Commisserations
Dolce & Gabbana Alta Mode: Dreams do come true
Gratitude For My Bahamian Homeland
Opinion: "When spending $6 million more than collected is not a loss"
Kirkland 'KB' Bodie: Still Waiting
Pam Burnside: Pathetic Utility Service
This Week in The Bahamas - Commentary by Elcott Coleby: July 19 - 24, 2015
Your weekly horoscope for July 24 - 31
Who Really Owns Baha Mar?
On the late Sergeant Edward "Eddie" Wilson
Caribbean Storytellers - Migration
Your weekly horoscope for July 17 - 24
This Week in The Bahamas Commentary by Elcott Coleby: July 6 - 10
Your weekly horoscope for July 10 - 17
Audrey Hepburn: Life of a fashion icon
Baha Mar, a flagging economy and more bad news!
Averting a Bahamas-China Rift over Baha Mar
This Week in The Bahamas Commentary by Elcott Coleby: June 29 - July 3
Your weekly horoscope for July 3 - 10
Bahamian vloggers recognized at The Island House
The Way Forward: The Political Value of a Bankrupt Tourism Policy
Leadership: What does it mean to you?
Your weekly horoscope for June 26 - July 3