No ease for the lower classes

UK Barbados Nation - - NEWS - – ANN WAL­COTT

THE PRE­VI­OUS AD­MIN­IS­TRA­TION bor­rowed money, put peo­ple out of work and raised taxes, fail­ing to fix the econ­omy.

So what are we see­ing now? Bor­row­ing more money, putting more peo­ple out of work and rais­ing more taxes on or­di­nary work­ing peo­ple who are strug­gling with no raise in years.

Oh, one more thing: they took money away from older per­sons who had saved for the re­tire­ment or for fu­ture large pur­chases, such as re­plac­ing an 18-year-old car, and won’t pay it back for 15 years.

I won­der if the new con­tracts for road re­pairs in­clude a por­tion of the con­tract pay­ments be­ing made in bonds which they will not be able to cash in for 15 years; or how many of the new min­is­ters agreed to ac­cept part of their big salaries in bonds to be col­lected in 15 years, since most of them are younger than the over-60s be­ing pe­nalised for sav­ing and could af­ford to wait for their money.

The Na­tional So­cial Re­spon­si­bil­ity Levy (NSRL) has not come off any­thing.

In fact, prices have gone up.

The Gov­ern­ment claims it has to look at in­fla­tion to see if that is the rea­son.

Cre­ate in­fla­tion

I left the only last Gen­eral Elec­tion meet­ing I at­tended, in Ren­dezvous, when the speaker said that an in­crease in the fuel tax would not re­sult in in­fla­tion. Any ac­coun­tant who has done cost­ing, or had to watch prices when the econ­omy was slow, knows that the big­gest con­trib­u­tor to in­fla­tion is oil prices. The new taxes, es­pe­cially the tax on wa­ter – I never thought I’d see the day a “Labour” party would tax wa­ter – cre­ate in­fla­tion.

If the min­is­ter thinks busi­nesses pay these taxes, they should spend a month work­ing in ac­counts at one of the food dis­trib­u­tors. I have tried re­peat­edly to ed­u­cate about cor­po­rate tax­a­tion. The only tax com­pa­nies pay is cor­po­ra­tion tax and ev­ery other tax is passed on to the con­sumer in the cost of the goods you buy.

Peo­ple pay their fuel tax, they pay their sew­er­age tax and their garbage tax. They also pay the fuel, sew­er­age and garbage taxes of ev­ery busi­ness where they shop. You pay the land tax, em­ployer’s Na­tional In­sur­ance, fuel tax,

VAT and ev­ery other tax you can think of for the im­porter, or man­u­fac­turer, the dis­trib­u­tor and the su­per­mar­ket re­tailer, ev­ery time you buy your gro­ceries. Put up taxes and you cre­ate in­fla­tion.

In the last SUN­DAY SUN, colum­nist Al­bert Brand­ford said that there is “a quiet re­bel­lion on aus­ter­ity mea­sures”. The only thing “quiet” about the re­bel­lion is that peo­ple are afraid to speak pub­licly for fear of vic­tim­i­sa­tion. Con­ver­sa­tions in pri­vate are not quiet.

He also claimed that the prob­lem is that the party did not pre­pare the coun­try for aus­ter­ity. He is wrong. We knew some cuts were nec­es­sary, but we thought they would be more fairly dis­trib­uted. The prob­lem is that whilst the lower and mid­dle mid­dle-class are be­ing hit with aus­ter­ity, the elite pro­fes­sion­als, big busi­nesses and up­per mid­dle to up­per eco­nomic bracket are not af­fected, or are able to pass their “aus­ter­ity” on to oth­ers by in­creas­ing prices and fees, cut­ting staff or re­duc­ing pay.

Bar­ba­dos had a brief 30 years of in­de­pen­dence be­tween 1966 and 1996, after which we re­turned to coloni­sa­tion. Only this time, we be­came colonies of the re­gional and in­ter­na­tional multi­na­tion­als which have taken ad­van­tage of changes in leg­is­la­tion (called lib­er­al­i­sa­tion) and tax­a­tion poli­cies pushed by right-wing groups which have been adopted by the last three, now four, ad­min­is­tra­tions.

When I wrote a crit­i­cism of

VAT in early 1997, I re­ceived a very sur­pris­ing call from a se­nior mem­ber of the Bar­ba­dos Labour Party, one of my fa­ther’s col­leagues whom he highly re­spected. What he said shocked me and I know it would never be said pub­licly.

He said I should not com­plain be­cause it was their in­ten­tion to “level the play­ing field” on taxes, to dis­trib­ute them more widely, and once the VAT rev­enue came in, taxes on peo­ple like me and my fam­ily would be re­duced. What he did not un­der­stand was that none of my fam­ily was in the tax brack­ets he an­tic­i­pated.

I was the ac­coun­tant at a pop­u­lar restau­rant be­tween

2001 and 2011 and in charge of main­tain­ing the pay­roll pro­gramme. I per­son­ally put through the PAYE and NIS changes on the pay­roll each Jan­uary from 2003 to 2007 there­after. I saw per­son­ally the changes which took place as he had pre­dicted.

What I did not know un­til last year, as I was not do­ing cor­po­ra­tion tax, was the huge (37.5 per cent) re­duc­tion which was granted to the largest busi­nesses be­tween 2004 and 2007. Just months be­fore the fi­nan­cial crash in 2008 (which re­sulted from the same right-wing lib­er­al­i­sa­tion and tax poli­cies in the United States and United King­dom), these cor­po­ra­tions re­ceived a huge gift from the Gov­ern­ment.

Brunt of suf­fer­ing

De­spite all the hard­ships and tax in­creases work­ing Bar­ba­di­ans have suf­fered since 2008, no sac­ri­fice was asked of those who ben­e­fited the most from the trans­fer of the tax bur­den down­ward by means of VAT, as was promised by my fa­ther’s friend.

In the Mini-bud­get in June, Prime Min­is­ter Mia Mot­t­ley asked these cor­po­ra­tions to pay only five per cent more, not the 15 per cent they were re­funded for ten years, whilst or­di­nary work­ing peo­ple have again been asked to bear the brunt of the suf­fer­ing. Now they are be­ing asked to swal­low the “in­fla­tion” caused by the new taxes which have ef­fec­tively re­placed the NSRL and pre­vented prices be­ing re­duced as promised in the bud­get.

Mot­t­ley is a lawyer; she is not trained as an ac­coun­tant or an econ­o­mist. I do not blame her, but she is be­ing ad­vised by for­eign-trained “ex­perts” steeped in the right-wing poli­cies whose main con­cern ap­pear to be the “sur­vival” of busi­nesses and in­vest­ment re­turns . . . .

I urge her, un­less she wishes to see a not so quiet re­bel­lion – such as took place in 1937 – to change her ap­proach and try to un­der­stand the ide­o­log­i­cal eco­nomic changes which have taken place in­ter­na­tion­ally since the oil cri­sis of 1973, and how these have served to crip­ple our econ­omy in the last 25 years. ED­I­TOR’S NOTE: The above let­ter was sub­mit­ted be­fore last week’s Min­is­te­rial State­ment by Prime Min­is­ter Mia Mot­t­ley on the ma­jor cuts in cor­po­ra­tion tax from next year.

(FP)

PRIME MIN­IS­TER Mia Mot­t­ley

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