by Rick Lowe

Mr. Ryan Pinder's comments about tax concessions in Tribune Business of Monday, December 10, 2012 are illuminating. The conversation is not about any individual as he attempted to make it. It is about bad government policy.

First, it is interesting that governments the world over attempt to convince taxpayers that they are "giving" something when it's their bad policy of high taxes that cause the problems in the first place. In other words they only give the "appearance" of helping infant industry with these so called "concessions".

Second, the Government decided to implement a reduced rate of duty for hybrid vehicles as a result of their "green policy". The motor industry was not a part of the discussion to lower the rate as none of them were allowed to import that type of vehicle when the "concession" was granted. In addition, some of the local companies are still not yet authorised to bring in hybrid vehicles so have not "received tax concessions to assist" with the selling of hybrid vehicles as Mr. Pinder suggests.

The central questions that are ignored are by Mr. Pinder are:

• Should tax breaks for "infant industries" continue forever or reduced over time? In other words, how long does a new compamy remain an "infant"?
• Is the tax too high in the first place that the government has to reduce it?
• Should these taxes simply be eliminated to avoid the resulting bureaucracy.
• How does the government collect the loans that are granted to those favoured businesses that do not survive?

The point is, the costs are dispersed over all taxpayers who eventually must pay for the the deficit and debt that are increased as a result of reduced revenue from tax breaks, subsidies or bad loans?

Government can assist business however by getting out of the way. They can reduce red tape/bureaucracy rather than creating obstacles like excessive import taxes and regulations that they then have to ameliorate for appearances sake.

It is unfortunate when some in the political class try to side track the country with the supposed merits of a policy rather than speak to the actual results.