‘Read my lips’

Stabroek News - - REGIONAL NEWS - York Post New

“Read my lips: no new taxes!” This phrase was one of the most quoted sound bites em­a­nat­ing from Ge­orge H W Bush, speak­ing at the 1988 Re­pub­li­can Na­tional Con­ven­tion, in ac­cept­ing the Re­pub­li­can pres­i­den­tial nom­i­na­tion. He was seek­ing to re-de­fine him­self as a tough de­ci­sion-maker and a leader, hav­ing been Vice Pres­i­dent to the charis­matic and very pop­u­lar Ron­ald Rea­gan.

Once in of­fice the new Pres­i­dent found out that keep­ing his prom­ise was much more eas­ily said than done. Fac­ing an in­creas­ing Fed­eral deficit by 1990 for which the Gramm-Rudman-Hollings Bal­anced Bud­get Act re­quired a manda­tory re­duc­tion, and with Con­gres­sional Demo-crats and even lead­ing Repub­li­cans be­ing in favour of in­creas­ing tax­a­tion, the Pres­i­dent re­leased the fol­low­ing state­ment, “It is clear to me that both the size of the deficit prob­lem and the need for a pack­age that can be en­acted re­quire all of the fol­low­ing: en­ti­tle­ment and manda­tory pro­gram re­form, tax rev­enue in­creases, growth in­cen­tives, dis­cre­tionary spend­ing re­duc­tions, or­derly re­duc­tions in de­fence ex­pen­di­tures, and bud­get process re­form.” The next day the head­line of the

in the most un­for­giv­ing fash­ion read, “Read my lips: I lied.”

Just this week our own Min­is­ter of Fi­nance, Win­ston Jor­dan, ap­peared to echo the se­nior Bush when he an­nounced at a press con­fer­ence that the 2018 Bud­get will have “no new taxes.” How­ever, be­fore the im­pact of his dra­matic an­nounce­ment could be ab­sorbed by those present, Mr Jor­dan went on to say, “I’ve never in­tro­duced a new tax, they were all the same tax. All we were do­ing is play­ing cards; we were shuf­fling them around and so forth.”

The use of a some­what con­torted elu­ci­da­tion which sab­o­tages his own punch line is not some­thing one nor­mally ex­pects from a Min­is­ter of Fi­nance. The Na­tional Bud­get is a fi­nan­cial and eco­nomic plan that the en­tire coun­try de­pends on to be a chart of the growth and de­vel­op­ment of the na­tion. Clar­ity is an im­por­tant fea­ture of such a plan, and from the CEO of a large firm to the wife and hus­band of a small fam­ily, all must be able to glean per­ti­nent in­for­ma­tion not just from the Bud­get, but from the Pres­i­dent and his Min­is­ter of Fi­nance when­ever they choose to make ut­ter­ances sur­round­ing Bud­get is­sues.

When Ge­orge H W Bush made his “no new taxes” boast, it was clear to all and sundry that he was not propos­ing to hike taxes dur­ing his first term in of­fice. When cir­cum­stances forced him to con­sider tax in­creases, he in­evitably suf­fered from the pub­lic’s loss of con­fi­dence in him that might have neg­a­tively af­fected his re-elec­tion chances, as he then be­came a one-term pres­i­dent.

The Guyana Min­is­ter of Fi­nance can play se­man­tics with the pop­u­la­tion all he likes, but the ex­pec­ta­tion that goes with the prom­ise of “no new taxes” is that the tax regime pro­posed in his new Bud­get will not be more bur­den­some than that of the 2017 Bud­get, and no tax rate in­creases – or the

kind of ‘shuf­fling’ to which tax­pay­ers were ex­posed in the last Bud­get ‒ are ex­pected.

The Min­is­ter is known for mak­ing much ado about the re­duc­tion in the rate of VAT by 2 per­cent­age points (from 16% to 14%) in the 2017 Bud­get, even though this re­duc­tion was ef­fec­tively eclipsed by him bring­ing new items un­der the um­brella of the VAT regime.

This ten­dency for ob­fus­ca­tion and dou­ble-speak by the Min­is­ter did not ob­scure the agony ex­pe­ri­enced in the first half of 2017 with the in­tro­duc­tion of VAT on es­sen­tial items like elec­tric­ity, water and pri­vate school fees. In his re­cent press con­fer­ence he stated that the VAT on pri­vate school fees had been given some con­sid­er­a­tion in the 2018 Bud­get. Given that the na­tion had al­ready been made to un­der­stand that the govern­ment would look again at VAT on pri­vate school fees in the com­ing Bud­get, ev­ery­one is ex­pect­ing that this will be dis­carded. As a con­se­quence, he should not dis­ap­point, at the risk of ir­re­deemable dam­age this time around to his own and his govern­ment’s rep­u­ta­tion.

Asked about the non-par­tic­i­pa­tion of the par­lia­men­tary op­po­si­tion in his round of “con­sul­ta­tions”

Jor­dan was un­fazed and un­apolo­getic, say­ing that the op­po­si­tion hav­ing been in­vited would ask for doc­u­ments al­ready in the pub­lic do­main, or doc­u­ments which could not be re­leased, and that he had never re­sponded to th­ese re­quests as they were not a ba­sis for con­sul­ta­tion. The Min­is­ter comes across all at once as cagey and au­to­cratic, lack­ing any un­der­stand­ing of no­tions of in­clu­sive­ness and con­sul­ta­tion, on which the APNU+AFC had laid such stress be­fore May 2015.

Min­is­ter Jor­dan should bear in mind that there is prob­a­bly no item more scru­ti­nized in the Na­tional Bud­get than tax­a­tion it­self, and a tax regime viewed as oner­ous, how­ever ob­fus­cated, is not likely to in­stil a high level of con­fi­dence in the econ­omy, even as he prom­ises that the 2018 Bud­get will fo­cus on stim­u­lat­ing the econ­omy. Ev­ery­one waits to see whether the Min­is­ter will keep his prom­ises.

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