With newspapers and columnists in the UK almost gleefully blaring headlines about Cayman being insolvent and writing stories about how our tax base is unsustainable, Leader of Government Business McKeeva Bush said yesterday the United Democratic Party government would not support income or property tax.
Instead, the Cayman Islands will attempt to increase revenues in other ways, while the same time trying to reduce expenses.
None of this immediately helps the crisis on hand, which is how the government is going to pay its bills, including civil servants’ salaries, this month.
So the government will go back to the UK with some sort of plan that doesn’t include income or property tax and, if gambling were legal here, we’d be willing to bet the UK will still say no to the request for increased borrowing.
It is true that the government might find a bail-out to the immediate problem in the form of a private-sector investment into some government asset. But looking long term, the government has to come up with a way of creating sustainable revenues, even in times of economic downturns.
There is the alternative of opening up development and population growth, which could drive the economy for years. This, however, could bring about fundamental changes in Cayman’s make up, both physically and demographically, which its citizens might find offensive.
Neither direct taxation nor over-development is very appealing, but that seems to be the primary two options available right now.
It’s up to Caymanians to choose their poison.