Dear Editor,
The JLP’s tax proposals are interesting, timely and necessary.
The context in which they have been presented is important. The Simpson Miller Government, in concert with the International Monetary Fund, has caused the Jamaican dollar to depreciate in value nearly 50 per cent over the last four years. This means that working class people who purchased two loaves of bread in 2011 can only buy one loaf today. They are poorer.
In this context, the Jamaica Labour Party’s commitment to exempt people earning less than $1.5 million from tax has caught fire with the electorate, and so it should.
It is not good enough to say our hands are tied, we can do nothing to help the workers who bear the PAYE tax burden. The budget gap can be closed partly by cutting the waste in Government. The size of the Government, like a wet blanket over the economy, must be removed. The Government is too large a part of the economy and is taking too much money out of the people’s pockets. This is a major reason for the lack of growth.
Joseph Matalon has decided that the tax proposals cannot be funded and that there are problems for taxpayers on the income margins. Taxation is often difficult and marginal relief is often a necessary feature of taxation. This, therefore, is not a good reason. Alternatively, taxpayers on the margin will have to produce more to make a case to their employer for an increase of pay. Further, and more importantly, Matalon chooses to ignore the effect of the velocity of money and its impact on the GDP that will arise from moving billions of dollars of spending power out of a non-productive Government into the hands of a part of the people who spend a very large part of their disposable income.
Some of the budget gaps can also be closed by taxing commercial property differently from residential property and also collect more revenue from the increased economic activity. We should support the give back of taxes as an economically astute act to restore some of the purchasing power lost by the working productive people.
Malcolm D L McDonald
Attorney-at-Law
Kingston 6
brenzia@cwjamaica.com
The JLP’s tax proposals are interesting, timely and necessary.
The context in which they have been presented is important. The Simpson Miller Government, in concert with the International Monetary Fund, has caused the Jamaican dollar to depreciate in value nearly 50 per cent over the last four years. This means that working class people who purchased two loaves of bread in 2011 can only buy one loaf today. They are poorer.
In this context, the Jamaica Labour Party’s commitment to exempt people earning less than $1.5 million from tax has caught fire with the electorate, and so it should.
It is not good enough to say our hands are tied, we can do nothing to help the workers who bear the PAYE tax burden. The budget gap can be closed partly by cutting the waste in Government. The size of the Government, like a wet blanket over the economy, must be removed. The Government is too large a part of the economy and is taking too much money out of the people’s pockets. This is a major reason for the lack of growth.
Joseph Matalon has decided that the tax proposals cannot be funded and that there are problems for taxpayers on the income margins. Taxation is often difficult and marginal relief is often a necessary feature of taxation. This, therefore, is not a good reason. Alternatively, taxpayers on the margin will have to produce more to make a case to their employer for an increase of pay. Further, and more importantly, Matalon chooses to ignore the effect of the velocity of money and its impact on the GDP that will arise from moving billions of dollars of spending power out of a non-productive Government into the hands of a part of the people who spend a very large part of their disposable income.
Some of the budget gaps can also be closed by taxing commercial property differently from residential property and also collect more revenue from the increased economic activity. We should support the give back of taxes as an economically astute act to restore some of the purchasing power lost by the working productive people.
Malcolm D L McDonald
Attorney-at-Law
Kingston 6
brenzia@cwjamaica.com