Well today is the day we've been waiting for. Or is it?
According to the newspaper yesterday, the Prime Minister has hinted at some austerity measures or belt tightening, but, on top of that we're told additional taxes are on the way.
The political class forged ahead for decades spending and borrowing and adding budget deficits each years as if economic reality could be set aside because our anointed politicos said so.
And now, when it looks like the well of borrowed funds might be drying up, and the backs of the governing FNM are against the wall, picking the pocket books of business and taxpayers seem easy targets. But are they?
Businesses will be forced to look to see where they can pass taxes on to their clients, because they have to make a profit to survive. Employment could very well be impacted through more layoffs.
Increased taxes could also impact start up businesses. Potential entrepreneurs might rethink trying to open a business in this climate of uncertainty.
In other words more taxes would be a mistake and slow the economy even more in this blogger's not so humble opinion.
The Laffer Curve comes to mind. See this You Tube Video on behalf of the Center for Freedom & Prosperity Foundation by Dr. Dan Mitchell of the Cato Institute.
Sometimes I think Parliament has out lived its usefulness. As Rex Murphy said on the Canadian Broadcasting Corporation show, The National, back in January this year; "the House of Commons is never quite so popular, as when it's closed."
As for the Opposition PLP? What can we expect from them? Serious proposals for the government to consider or the usual partisan blather?
To quote Rex Murphy again, "Parliament is the ultimate partisan instrument, and both sides of the house play it like a tattered violin for whatever petty advantage they can get out of it."
Frankly, government is far too big, costing taxpayers far too much, and the restraints that seem to prevent opening a business are like hand cuffs made of carbon steel, the hardest known metal alloy.
The political class has to understand that without the creation of wealth, they can raise taxes all they want, but their revenue will decline when the entrepreneurial spirit is ultimately defeated.
It appears they have seriously crimped the auto sales business Rick, sorry to hear, of course their own revenue from that catagory of goods will also take a hit, but man, taking small economical cars to 65% isn’t exactly stimulating economical car sales is it?
As for larger than two liter engined vehicles at 85%, …….
Then too we have the 50% increase in Business license fees for the commercial banks.
Hmmmm. I wonder who they think will absorb that hit?
Bank Profits? I think we know better than that.
In the end, all costs are passed on to the consumer, whether individual or company.
Taxes also.
Real estate transactions also to face additional 2 %
Needless to say, they still don’t get the point.
That much is obvious.
LEd lighting to be 0% duty, but who can afford a $35
lightbulb first cost U.S.?
Yes, they will last 10 years, and yes, they are the up and coming technology but, I cannot see to many retailers stocking them.
If only we could get them to realze chickens with hands around their necks don’t lay eggs……….
Hi Chris:
Basically the industry is in shock today.
I fear the unintended consequences of this.
There was not one iota of discussion with industry.
Every time this happens we explain our lead times etc, but they ignore us. Intentionally, I’m sure.
But as someone said to me today, they’ve finally succeeded in bringing the country to its knees.
Don’t cry for me….
Personally I don’t think any of these measures will do much for their revenue, certainly not to the degree that they project.
What was the duty structure on cars less than $10K and the other catagories?
I lost track when they killed stamp tax last year.
I’m sure the banks will be in shock also.
As for being on our knees,
The best (or worst)is yet to come.
how long will it take price control to adjust your allowable “profit”/markup for new, more costly imports?
After last years budget:
$0 – $9,999 was 50%
$10 – 19,999 was 60%
$20 – $24,999 was 75%
$25,000 plus was 85% &
Commercial vehicles were 60%
As I noted, the Laffer Curve will show it’s ugly head.
Why not charge 100% if they believe raising taxes is the answer?
Business models have to be rethought now for sure.
I read the budget communication last night, and I monitored the debate on legalizing the number business, it is apparent that Bahamians want to have their cake and eat it too. We are in a financial crisis and there seems to be no easy answer, there will be a negative fall out no matter what attempt is made. I believe once you are elected by the majority of the people you govern in the best interest of all the people and not special groups. I believe that if the number business which is the biggest business in town were to be legalized and the government were to recieved reneuve from it most of the taxes could have be avoided. Banks are regularized and monitored by the Bank Supervision Dept of the Central Bank of The Bahamas, the same could be dont for the Number business, which is not going any where any time soon. Put Bank Supervisin or the Security Commission or some reputable agency in charge of monitoring, regularizing and collecting fees and fines in charge of the number business and benefit from what is taking place. If private banks can pay $25,000 or more for licensees that flowers that should do the same and tax their maga income, they can afford it. I think this thing needs to be revisited because we in trouble here.
And on top of all this, we have the eternal business license fee, a fee which is based on revenue,which will go down, so therefore, so will the fee will it not, or are they going to put that up to.They have not thought this thing through.Its now official,Ingraham & Oboma are members of the same socialist group,take from those who work for it & give to those who don’t.Has he gone out of his freekin mind ?
I dont understand, who is the PM giving any thing to? I think at this junction we all are in the same position the haves and the dont haves…every man/woman gonna have to fend for him/her selves. I believe there is a lesson in this for all of us…money management, living within ones budget, send only what you have, stop living on credit, we all have to do some major adjustments.
Yes but, on top of all this they want to do this, that & the other like health care etc.If you have to cut back, then cut back.Stop the funding of Bahamas Air, ZNS etc, just stop it, sell & get out of these money hogs.The government, & it does not matter which one,just hired people willy nilly & we have to pay the price.I have had enough of it.Is that not taking ?
The new tax rate on vehicles, will be counter-productive from the govt. point of view, because it will lower demand, so at best, govt. revenue from those vehicles will be either flat or may even decrease, because there will be less coming in.
Also the increase in departure tax, as well as the increase in the room tax, will already cause the cost of a Bahamian vacation to increase, and will make our Caribbean competitors, who basically offer the same thing as us, (sun sand and sea but cheaper, eg. the DR)more attractive to many vacationers searching for a Caribbean vacation, but not wanting to break the bank.
Jeez what a budget. It certainly won’t help the travel industry in the Bahamas and I don’t think we will see any helpful tax breaks for 2012 at least,
Larry, welcome to supply side economics.. Demand management throughout the 20th century has been one great economic failure after another.. The 21st century will be no different..
Tourism today may become a write-off.. The key component, the American visitor, starting next year will be taxed to death and will have limited discretionary purchasing power to spend on expensive Bahamian vacations.. Over the past 30 years supply side tax cuts from the early 1980’s through 2007 as well as easy credit fueled American discretionary spending and caused tourism to boom in the Bahamas.. Well that game appears to be over.. Obamaism, through massive government spending (demand side management), trillion dollar deficits and massive tax increases, will kill our tourist product.. And how does our government respond, raising taxes and destroying incentives to increase production and employment.. Thank you Mr. Obama what ever happened to your promise “everyone wins.” Just another one of your lies.. Soon we will be singing, Where have all the American flowers gone, long time passing..
Wake up Bahamas before it is to late.. Our new taxes more than likely will produce less revenues than projected and our deficit will continue to expand out of control.. Sorry Rick, no new car for me next year.. I can only pray that I am wrong.. Wrong for the sake of our nation and for the Bahamian people who must pay the piper.. Lets hope that he who pays the piper will someday call the tune..
@ DP…i couldn’t agree more…get rid of them, especially Bahamasair, it makes asolutely NO sense pumping funds into something that continually puts you deeper in the whole. But what does our government do? They run promotions selling seats for less than cost to try and get people to fly with them… like they say ‘common sense ain’t so common!!’
Who the hell would want Bahamasair.. JetBlue flies from Nassau to Fort Lauderdale for 59 dollars round trip.. Departure taxes and all in Fort Lauderdale are about 29 dollsrs.. Nassau departure fees and taxes are about 90 dollars one of the highest perhaps in the world.. Sounds like a rip off to me.. I wonder what the full ticked price on Bahamasair maybe..
Maybe, perhaps just maybe JetBlue might acquire our national carrier.. But then again that might be just foolish pipe dreams..
I understand we had a buyer for Bahamas Air some years ago & Ingraham put a stop to it, why ? We also need to find a way to stop the huge amount of American boats that are taking a lot of fish & lobsters from our waters, a lot of them on a daily basis.I love America as much as anyone else, but you could not do in America what Americans are doing to us in our waters, they are leaving nothing behind.I say tax them heavily.Instead of pumping millions into Bahamas Air, get a few small boats & try & police our water’s better.Increase the permit fees to cruise our waters, the only thing they are spending here is the crap they pump out of their toilets.
Buy Bahamas Air, who would be so crazy.. Could only be Butch and the gang of fools who were running Air Jamaica.. Guess they were thinking economy of scale.. Oh, but now we know they didn’t even have a scale.. So much for the fool hardy..