by KAVON FIENNES
Back in May 2009 (see above link), UWI Economist Dr. Damien King gave a compelling argument for taxing the poor in an article as guest writer for the Business Gleaner.
He stated that making tax exemptions on basic food items actually benefited the wealthy in Jamaican society as they were purchasing the most of such exempted items as “bully” beef (tinned corned beef). The wealthy classes were also disproportionately benefiting when these exemptions were on given to higher end consumer goods purchases such as computers. Dr. King cites Scotiabank as an example of one of the biggest benefactors of this specific exemption, as a corporation.
Taxation must be equitable, everyone should pay equally, a flat tax rate. So, Dr. Damien King got his premise sort of semi-correct, as he did not go far enough in his desire to see a uniform and complete widening of the tax net. However Paediatric Neurosurgeon, Dr. Ben Carson, in his address at the National Prayer Breakfast did just that in Washington D.C. last week, with President Obama two seats away from him. In his article from the Gleaner, Dr. King has as the penultimate paragraph:
“But do the poor necessarily have to suffer along with the rich when we remove the exemption? Not at all. The objective, remember, is to ameliorate the daily struggle of the poorest and neediest. Well, there are better ways to do that. Public health, public education, public transportation, and the PATH programme are all accessed overwhelmingly by the poor. So if that $100 of foregone GCT were instead used to expand the school feeding programme, providing breakfast at some of our public schools, almost all of that expenditure would actually reach the poor. No resident of Cherry Gardens has slipped into the PATH programme. Not even one.”
I have a few points to make on the flaws in this line of reasoning.
i) Public health while very important in the reduction of communicable diseases through vaccination and vector control programs, has seen better days. At its peak, Public Health in Jamaica was under the stewardship of a Public Health Hero of the Americas, Sir Kenneth Standard and we were able to accomplish significant advancements in things such as the eradication of malaria in the 1960’s. Those halcyon days are gone and public health is not in good shape, with poor inner city communities baring the brunt of it. There has been a recurrence of malaria cases, beginning in November 2006. We have entire lower class communities enveloped in smoke from fires at the Riverton City dump, others have overflowing sewage in their streets. There is filth in our gullies, and widespread rat infestation and uncollected garbage in various neighbourhoods.
If we extend public health to “free health care” in hospitals, let’s not forget that again the poor have to face the horror of public hospitals. Long waiting times, under-equipped facilities and broken down machinery, with limited space. I have heard stories of two mothers and two babies on a single bed on a post-natal ward at a prominent hospital in the second city. Not to mention feeding rice to the mentally ill with a shovel at the Bellevue Psychiatric Hospital.
ii) Public education is not of a good standard in Jamaica. Everyone knows that the poor disproportionately face the daunting task of entering the work force with a substandard education after their tenure in government-administered schools. Research in the Caribbean recently showed that public spending on tertiary education favours the wealthy. I am almost certain that if a similar analysis were done of public expenditure on secondary education, the greatest benefactors would be the children of middle and upper class families attending traditional (non-government administered) high schools, as opposed to the poor attending government administered schools. Additionally, the Education Tax that we see on our payslips is not earmarked for education, it is actually a hidden income tax. I have already argued that it’s time to abolish public schools.
iii) Public transport is a farce. I don’t understand how Dr. King can justify the taxation of the entire country to subsidize public transport which is only available to citizens in the Corporate Area (Kingston & St. Andrew) and a small part of St. Catherine? Even though it is predominantly used by the poor, the JUTC is a loss making state entity, bailed out with tax dollars… Where is the justification for this action? How can this action by government be seen as ethical or moral?
We are J$1.7 trillion in debt. The government was the one who got us into this debt crisis and yet we are expected to dig the nation out of trouble. The government must cut spending and stop borrowing money with the adding to our already long list of creditors.
Taxing only those who are already paying a lot of taxes may actually drive the residents of Cherry Gardens onto the PATH program or overseas. We need everyone to pay their fair share of taxes, including the poor.
Kavon Fiennes is creator of the RightFromYaad blog. He is a 30-something year old ‘Black’, sometimes ‘Brown’, Jamaican. He is a former socialist, nationalist and Democrat, turned Libertarian and semi-conservative since his mid 20′s. He still holds lingering left-wing views on the way society ought to treat the destitute and elderly.