Suggestions for the premier

| 04/08/2012

I write to you today along with my fellow Caymanians, Chaz Hill and Eden Hurlston.  Together, we represent the members of a group known as Caymanians & Expats United Against Taxation. As a group we have very little interest in how our country has arrived at the threshold where we now stand.  We concern ourselves with the past only so that the mistakes of ourselves and others may be identified, then used to educate ourselves in such a way that history is unable to repeat itself.

Our vision is for the future.

Today we wish to convey to you our thoughts in relation to the Community Enhancement Fee which has been proposed recently.  To begin with, we would like to address the title of this proposed legislation.

Despite the euphemistic title you have used to describe a payroll tax it remains just that, a tax.  The word tax can be defined as a compulsory contribution to state revenue, levied by the government on workers’ income.  Your proposal is therefore a direct tax which is to be levied on a subsection of our population, so please allow us to refer to it as such.

The payroll tax which has been put forth by your administration is discriminatory, and as our group looks forward to the implementation of Human Rights in Cayman on November 6th, 2012, we cannot accept it.  Additionally, the proposed tax will reduce the purchasing power of those on whom it is levied, and therefore be detrimental to our economy.  Furthermore, the implementation of a direct tax will no longer afford the Cayman Islands the title of a tax neutral jurisdiction, which is the foundation of the way in which most countries of this world see our nation.

Of particular concern to us is the information contained within the Miller-Shaw report.  As you know the Miller-Shaw report is within the public domain, and has been since it was commissioned by the current administration in 2009.  This report, which was compiled by professional economists, speculated that the implementation of direct taxation in our jurisdiction would result in the contraction of our economy.

Since the announcement of the proposed payroll tax it has been highly scrutinized by the international press.  Most notably, an article published on Forbes.com which likens the implementation of this payroll tax to fiscal suicide.  To date we have been able to locate no less than six international outlets which have carried this story, and we are yet to find a single one which believes this policy will benefit our country. 

We also assume your administration has recently received reports which present evidence contrary to the above.  We arrived at this assumption as it is simply impossible for us to believe that our government would be irresponsible enough to implement a policy of this magnitude, which goes directly against the conclusions reached by their own commissioned reports, without first consulting a wide range of knowledgeable economists. 

Therefore, on behalf of the Caymanian people, we call for you to release these reports into the public domain so as to alleviate some of our concerns related to the payroll tax which you intend to enact.

On Monday, as representatives of our greater community we wish to present to you, a series of proposals which show how our government can increase existing revenue streams as well as produce new ones, whilst also minimizing the negative effects of such measures on our economy.  Together, these proposals, none of which involve direct taxation, amount to an increase of projected government revenues which is by no means insignificant.

Although some of the proposals we intend to propose shall require initial capital injections to create a new stream of revenue our group has aimed to maximize short term return by focusing on alternatives which have preexisting methods of collection.  This is strengthened by our opinion that an approach which produces the desired revenue through a series of relatively small gains across a diversified range of government policies provides less risk of a budget shortfall than would otherwise be the case with a single piece of legislation aimed at collecting fifty million dollars.

It is worth noting, however, our group is of the firm belief that the people of the Cayman Islands have not met these difficult times due to low revenues.  Rather, we acknowledge the fact that our current budgetary issues are the result of careless and excessive expenditure by our government in recent times.  This belief is in fact reiterated by the very definition of deficit; the amount by which expenses exceed income.

As stated, our vision is for the future and we consult the past to learn from the mistakes of ourselves and others.  Last year your administration successfully proposed a budget which did not include long term borrowings and perhaps generated a small surplus.  However, the budget which has just been submitted to the FCO appears to propose total expenses which exceed last year’s projections by nearly sixty million dollars. 

To achieve the positive results of last year your administration asked the public to provide you with greater amounts of revenue.  Although there were several, the request which stands out most significantly is the two percent increase in duty charges on all dutiable items.  Despite the public obliging these requests we again find ourselves being asked to provide government with additional revenues.

Although the revenue generating measures we shall propose include both short term and long term measures, we refuse to once again allow our government to use these measures as a temporary patch over our increasingly unsustainable budget.  Doing so would simply postpone the inevitable and we would once again find ourselves in this situation within a few years.  We will therefore also present to you a series of proposals which are aimed at reducing government expenditure. 

Mr. Premier, you have stated that you are open to hearing alternate solutions, as you do not desire to impose a policy of direct taxation.  Our group feels that we will be able to provide you with a list of reasonable and economically viable alternatives.  We will therefore look forward to your response, and respectfully as that it be made within the public forum as the group which addresses you today is nothing more than the voice of Cayman.

The above has been forwarded to the office of the premier in response to his recent invitation for suggestions to help raise a budget surplus of $76million.

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Comments (11)

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  1. Anonymous says:

    What's the email address of the Premier?  I would like to email him an alternative?

     

    CNS: Mckeeva.Bush@gov.ky

  2. anonymous says:

    " two percent increase in duty charges on all dutiable items."  anymore duties and it will kill the goose, increasing the cost of living. how interesting it is to see expats by the numbers come out and complain about this fee. if it was caymanians having to pay this fee and not expats, would they be complaining and protesting for us?  caymanians have no place else but here  – expats can always run away when the sh%t hits the fan

    • Anonymous says:

      UDP already increased duties by 10%, not 2%. Going from a rate of 20% to 22% is a 10% increase in gross duty revenue to CIG and a 10% increase in taxes on we the people. Mac would probably argue the point as I don’t believe the local schools cover percentages until early 7th grade. I doubt he paid much attention to his teachers anyway.

    • Anonymous says:

      Stop saying Caymanians have no place to go but here, that is the stupidest statement ever, very few countries if any have the ability for their citizens to be naturalized by another country (British Naturalization) and obtain a passport that enables them to freely remain in their own country or go to Britian or any EU country to permanently live and work. I’m holding two passports because of this privilege so stop that lame old excuse you you have been given this privilege and all you can do is whine about ex-pats go home when we have been given the right without their say really to invade their countries by the droves and take advantage of all of their social services, take work from their indengenious population and participate in their society. We as Caymanians really need to check our ego at the door and be appreciative of such things. Oh and let’s not forget how many of us went to the US to have our children, those children are by default US citizens and if at 18 they recomfirmed they can go there too so we have it pretty darned cushy to be so arrogant to say we have no where else to go

      • Anonymous says:

        Whenever you make statements like "We as Caymanians" please don't include me and my family, because as far as we know, Britain is not where we were born. This place, Cayman Islands is our home and there is no place like living and working at home!

        • Anonymous says:

          The poster was accurately replying to the Caymanian who said Caymanians have nowhere else to go, when in actual fact, Caymanians have the ability to go and reside permanently in the UK or any of the EU member states, and I might add, live very well from the benefits and ameneities paid for by UK and EU tax payers, despite the fact that they (the Caymanians) have never paid a penny in taxes themselves.  Now Mr Bush will try and fool you and tell you this is not the case, but I have a Caymanian relative who has just made the move, and has realised just how much he can get out of the British tax system, despite never paying into it himself.  And he's milking it for all he can get.  He now realises that the propaganda McKeeva was spouting last week about taxes in other countries (which he was believing up until arriving in the UK himself) is pure bullshit aimed at getting supporters rather than getting the truth out.

  3. Anonymous says:

    Casey Golf, nice article, but could you list the ALTERNATIVES that you feel will bring in enough revenue to balance the books; and secondly, could you as well tell us how you would address with the social implications of how you would protect Caymanians that have no jobs and their livelihoods are constantly threatened by a predatorial private sector that looks out more for expats than it does for them. Thank you for the article. It's a good contribution. JF

    • Anonymous says:

      Dont just look at the alternative revenue, the real way to solve this problem is to address the outgoings first. You will still need to look for a reliable source of income, but collecting more to satisfy overspend is economic suicide.

      You dont have to look far for savings, of course there is the fact that your Civil Service is bloated and inefficient, but there are much more obvious problems, Cayman Airways where the subsidies are paying for enormous numbers of your population to travel free, the Turtle farm, Gas cards and many others that are succinctly detailed in an earlier Viewpoint article.

      I suggest that there are two absolutes you must address in addition to those referred to in that article. Your civil service is too big, but even more important, the sections that record and publish your finances are so inefficient that you dont even know where the overspend is, just look at the comments of your excellent Auditor General. Then there is the matter of tendering for capital projects, so inefficient that hideous overspend is inevitable, but even worse, corruption by way of payments to politicians and officials could well be happening without the public knowing. Maybe that isnt happening ( I would hazard a guess it is) but the fact that you dont know is costing you dearly, just read your excellent auditors reports!

      And a final thought, maybe thats why your auditor is unloved by some?

       

    • Casey Goff says:

      Our group does feel very bad about the fact that we have been forced to release this without the alternatives that we have in mind. We had been planning to release this statement and our suggestions simultaneously on Monday. However, in light of the sudden influx of press releases from local businesses and the Premier we refused to remain silent.

      Our group is quietly working to complete our proposals and intend to deliver them to the premier tomorrow.  Additionally, as we feel one of the major flaws of this government is their lack of transparency we will choose to lead by example.  Therefore, once these suggestions are ready they will also be released to the public as has been the case with all of our previous documents.