The Bahamas Weekly Facebook The Bahamas Weekly Twitter
Columns Last Updated: Dec 5, 2014 - 10:25:14 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
Your weekly horoscope for Apr 17 - 24
The Crack in Chiropractic
The Walter Scott shooting: Driving while Black
Old world craftsmanship with the exotic of distant lands
Are You a Cyber Criminal?
Your weekly horoscope for Apr 10 -17
Was the private sector tax coalition duped on Value Added Tax (VAT)?
This Week in The Bahamas Commentary by Elcott Coleby: Apr 6 - 10
Birding Fieldtrip to West Grand Bahama
Youri Kemp: Do US presidential elections matter to The Bahamas?
Youri Kemp: The IMF came to town, and then they left!
This Week in The Bahamas Commentary by Elcott Coleby: Mar 23 - 27
Your weekly horoscope for March 27 - April 3
Latrae Rahming: Ambassador to China Appointment Long Overdue
Are lower oil prices causing chaos? A Latin-American and Caribbean perspective
Your weekly horoscope for March 20-26
Kirkland 'KB' Bodie: Culture Before Politics
Elizabeth Burrows: Harbour Island Horse Excursion
This Week in The Bahamas Commentary by Elcott Coleby: Mar 9 - 13
Why many young Bahamians, after going abroad for education, refuse to return
Momma Mia! Dolce & Gabbana features mothers and babies on the runway
Your weekly horoscope for March 13 - 20
Youri Kemp: Exchange controls and the Bahamian dollar- Revisited
This Week in The Bahamas Commentary by Elcott Coleby: Mar 2 - 6
Elcott Coleby: The Need for Universal Health Insurance
The Bahamas' Foreign Policy Priorities and Bahamas - Caribbean Relations
This Week in The Bahamas Commentary by Elcott Coleby: Feb 23 - 27
Your weekly horoscope for February 27 - March 6
Valentino creates bohemian chic for spring
Youri Kemp: Exchange controls and the Bahamian dollar
Donald Demeritte: The Bahamian Professional’s Dilemma – Who Buys Bahamian?
Johnny Depp and Amber Heard Bahamas Beach Wedding
This Week in The Bahamas Commentary by Elcott Coleby: 16 - 20
The Bahamas Christian Council and Junkanoo Carnival
Your weekly horoscope for February 20 - 27
West End – “The Capitol of Grand Bahama” – Feast or Famine
Getting Married in the Bahamas
(Audio) Youri Kemp: The mid-term budget: Let's give it justice!
Gianni Maanaki Haute Couture
Elcott Coleby: 'Belonger's Permit' Law Corrects Current Statelessness