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Friday, January 4, 2008
Question(s) for the People's Democratic Congress (PDC)
UPDATE, Jan/5/08: Finished the post.
DISCLAIMER: IANAE, I Am Not An Economist.
DISCLAIMER: IANAP, I Am Not A Politician.
DISCLAIMER: IAJAQAATPACOB, I Am Just Asking Question(s) As A Tax Payer And Citizen Of Barbados.
DISCLAIMER: IAJAQAACIWNPA, I Am Just Asking Question(s) As A Curious Individual With No Political Agenda.
The last disclaimer is important. This is a non-partisan (non political) post. I am not interested in the BLP, DLP, nor PEP. I am only interested in what the PDC recently had to say (at the time of this post, I cannot recall the exact date of The Nation's article which carried the PDC's comments), with regards to their goal of abolishing taxes (as well as interest rates and foreign land ownership, but I am interested in their abolition of taxes proposition and I will be focusing primarily on that).
My interests are purely academic. Not political. With respect to politics, I ask that reader's take note that, as far as I can recall (but correct me if I'm wrong), none of the other political parties (BLP, DLP and PEP), have ever discussed abolishing taxes.
It is only the PDC that has made this statement.
Now, why am I asking the PDC this question? Because (oops, sentences are not supposed to start with 'because', are they?), I am genuinely interested and curious, in trying to understand:
1) Why the PDC would want to abolish taxes and
2) How they (the PDC), intend on paying for and providing social services to the public if their party were ever to come into power.
Remember folks, I'm just a layman, seeking a little clarification and knowledge. That's all. No harm, no foul.
Before we go any further, what are taxes? From Wikipedia (albeit, not the most professional, nor academic site to reference, but a quick and easy one to use nonetheless):
"A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government […] a payment exacted by legislative authority."[1] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government […] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."[1]"
I underlined 'support the government' because the government needs support in providing certain social services (police, fire, health, education, etcetera). The economists, politicians and academics can debate this definition and my addition, further. I however, will not. I will use the above definition as a suffice explanation of what a tax is.
NOTE: I am not saying that taxes are fair, or unfair, or that they are easy to pay, or that they are equally distributed amongst all of the different classes of society (i.e., low, mid and upper class, and everything in between). I am not interested in that. I'm not even interested in debating the tax rate in Barbados (for companies and individuals), nor am I interested in comparing it with other countries. No, take that discussion elsewhere, please. Better yet, go and debate it with a Tax Attorney or an Accountant :-)
To the PDC, I say unto thee: This, as far as I understand it from a layman's point of view, is why taxes are necessary and what they pay for: (Anyone out there is free to offer a counter arguement)
1. Roads. Taxes pay for the roads that we drive, walk, cycle and drive our donkey carts on. The roads may or may not be perfect (leave the politics out of this), but if the government decided to let a private sector company (i.e., companies that exist primarily to increase shareholder value, and to generate profits), take over the development and maintenance of the island's road network, what do you think will happen, PDC? Who do you think the bulk of the burden fall upon? The low, middle or upper income classes, PDC?
2. Water. Taxes pay for the water you use. Who will be able to afford, or have access to water supplies if there are no taxes to pay to the government (which uses tax revenue to provide these services)? Yes, I know that our water 'services' may or may not be the best (leave the politics out of this), but they are being subsidized and/or provided for, by the government. Can you imagine a privatized (or non-nationalized) water company? I recall from my CXC POB (Principles Of Business) studies that private companies exist to make a profit. I further recall from my MBA studies that private companies, of all shapes and sizes, are primarily interested in increasing shareholder value (shareholders are the people that own the company). The have to have increase the value that the shareholders made in the company, else they will investment in another business. Do you, the PDC, think that shareholders of a private water company (unless they are very morally and ethetically minded) are interested in the good of the people, or are they more interested in the bottom line?
3. Police. PDC, the taxes that you want to abolish help pay for the protection and security of life and property. The police also maintain law and order in society. (Leave the politics out please, remember this is purely an academic discussion). How, PDC, do you plan on maintaining law and order in society, as well as protecting life and property, when there are no taxes to pay for the police force? Do we then depend on private security firms, firms like Blackwater?
4. Fire. PDC, a government typically provides a fire service (leave the politics out of this please), do they not? What happens when someone's house or business burns down. Without taxes to pay for that fire service and the people that operate the fire service, who will put out the fires and protect life and property? Or are you, PDC, saying that this sort of service is best left in the hands of a private sector company? What if the less fortunate cannot afford to pay the bill after having a private fire company put out the blaze, what then? Or better yet, when someone's house or business is burning, they call the private fire company and negotiate a rate before putting out the fire. Remember, a private company is interested in their bottom line. Maybe it would be more competitive and beneficial to the public if there was more than one private fire company. That way, you'd have competition and one could always go to 'the other guy' for a cheaper price (you better hope that your house doesn't completely burn down while you haggle over price).
In conlusion, PDC, consider what I've said above, and apply it in turn to other issues like: Education, NIS, Health Care and whatever other government provided services you can think of (please leave the politics out). When you abolish taxes, let me know what you intend to substitute them with in order for Barbadians to have access to social services.
P.S., I'd like to wish everyone all the best for the new year!
DISCLAIMER: IANAE, I Am Not An Economist.
DISCLAIMER: IANAP, I Am Not A Politician.
DISCLAIMER: IAJAQAATPACOB, I Am Just Asking Question(s) As A Tax Payer And Citizen Of Barbados.
DISCLAIMER: IAJAQAACIWNPA, I Am Just Asking Question(s) As A Curious Individual With No Political Agenda.
The last disclaimer is important. This is a non-partisan (non political) post. I am not interested in the BLP, DLP, nor PEP. I am only interested in what the PDC recently had to say (at the time of this post, I cannot recall the exact date of The Nation's article which carried the PDC's comments), with regards to their goal of abolishing taxes (as well as interest rates and foreign land ownership, but I am interested in their abolition of taxes proposition and I will be focusing primarily on that).
My interests are purely academic. Not political. With respect to politics, I ask that reader's take note that, as far as I can recall (but correct me if I'm wrong), none of the other political parties (BLP, DLP and PEP), have ever discussed abolishing taxes.
It is only the PDC that has made this statement.
Now, why am I asking the PDC this question? Because (oops, sentences are not supposed to start with 'because', are they?), I am genuinely interested and curious, in trying to understand:
1) Why the PDC would want to abolish taxes and
2) How they (the PDC), intend on paying for and providing social services to the public if their party were ever to come into power.
Remember folks, I'm just a layman, seeking a little clarification and knowledge. That's all. No harm, no foul.
Before we go any further, what are taxes? From Wikipedia (albeit, not the most professional, nor academic site to reference, but a quick and easy one to use nonetheless):
"A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government […] a payment exacted by legislative authority."[1] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government […] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."[1]"
I underlined 'support the government' because the government needs support in providing certain social services (police, fire, health, education, etcetera). The economists, politicians and academics can debate this definition and my addition, further. I however, will not. I will use the above definition as a suffice explanation of what a tax is.
NOTE: I am not saying that taxes are fair, or unfair, or that they are easy to pay, or that they are equally distributed amongst all of the different classes of society (i.e., low, mid and upper class, and everything in between). I am not interested in that. I'm not even interested in debating the tax rate in Barbados (for companies and individuals), nor am I interested in comparing it with other countries. No, take that discussion elsewhere, please. Better yet, go and debate it with a Tax Attorney or an Accountant :-)
To the PDC, I say unto thee: This, as far as I understand it from a layman's point of view, is why taxes are necessary and what they pay for: (Anyone out there is free to offer a counter arguement)
1. Roads. Taxes pay for the roads that we drive, walk, cycle and drive our donkey carts on. The roads may or may not be perfect (leave the politics out of this), but if the government decided to let a private sector company (i.e., companies that exist primarily to increase shareholder value, and to generate profits), take over the development and maintenance of the island's road network, what do you think will happen, PDC? Who do you think the bulk of the burden fall upon? The low, middle or upper income classes, PDC?
2. Water. Taxes pay for the water you use. Who will be able to afford, or have access to water supplies if there are no taxes to pay to the government (which uses tax revenue to provide these services)? Yes, I know that our water 'services' may or may not be the best (leave the politics out of this), but they are being subsidized and/or provided for, by the government. Can you imagine a privatized (or non-nationalized) water company? I recall from my CXC POB (Principles Of Business) studies that private companies exist to make a profit. I further recall from my MBA studies that private companies, of all shapes and sizes, are primarily interested in increasing shareholder value (shareholders are the people that own the company). The have to have increase the value that the shareholders made in the company, else they will investment in another business. Do you, the PDC, think that shareholders of a private water company (unless they are very morally and ethetically minded) are interested in the good of the people, or are they more interested in the bottom line?
3. Police. PDC, the taxes that you want to abolish help pay for the protection and security of life and property. The police also maintain law and order in society. (Leave the politics out please, remember this is purely an academic discussion). How, PDC, do you plan on maintaining law and order in society, as well as protecting life and property, when there are no taxes to pay for the police force? Do we then depend on private security firms, firms like Blackwater?
4. Fire. PDC, a government typically provides a fire service (leave the politics out of this please), do they not? What happens when someone's house or business burns down. Without taxes to pay for that fire service and the people that operate the fire service, who will put out the fires and protect life and property? Or are you, PDC, saying that this sort of service is best left in the hands of a private sector company? What if the less fortunate cannot afford to pay the bill after having a private fire company put out the blaze, what then? Or better yet, when someone's house or business is burning, they call the private fire company and negotiate a rate before putting out the fire. Remember, a private company is interested in their bottom line. Maybe it would be more competitive and beneficial to the public if there was more than one private fire company. That way, you'd have competition and one could always go to 'the other guy' for a cheaper price (you better hope that your house doesn't completely burn down while you haggle over price).
In conlusion, PDC, consider what I've said above, and apply it in turn to other issues like: Education, NIS, Health Care and whatever other government provided services you can think of (please leave the politics out). When you abolish taxes, let me know what you intend to substitute them with in order for Barbadians to have access to social services.
P.S., I'd like to wish everyone all the best for the new year!
Labels: Barbados, economics, humour, life, Philosophy, politics
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Your comments are well noted Amit and understood. However, I fear that around "silly season" (as the pre-Election period is usually referred to) brings with it much spoken word without much thought.
I believe this remark was also a result of "silly season". I do not believe that Mr. Adamson meant to abolish ALL taxes as was stated in the paper, but rather any taxes directly impacting on the small man - for example income taxes. I'm nto certain how many other taxes are intended for abolition but abolishing income tax has been successful in promoting the growth of the middle class in other countries and it remains so to this date in some. All it requires is some skillful management of revenues and expenses. This is believe was Mr. Adamson's intent and I interpreted the news article in that manner.
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I believe this remark was also a result of "silly season". I do not believe that Mr. Adamson meant to abolish ALL taxes as was stated in the paper, but rather any taxes directly impacting on the small man - for example income taxes. I'm nto certain how many other taxes are intended for abolition but abolishing income tax has been successful in promoting the growth of the middle class in other countries and it remains so to this date in some. All it requires is some skillful management of revenues and expenses. This is believe was Mr. Adamson's intent and I interpreted the news article in that manner.
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