Today’s Editorial for February 25: Taxation isn’t the answer

If there was ever any doubt that
the Cayman Islands should not impose taxes on her citizens, we now have a
definitive word.

Cayman Finance commissioned a
report on the effects of the introduction of direction taxation.

The details of that report are a
resounding ‘no’ to the implementation of direct taxes to the people and
businesses of the Cayman Islands.

Taxes hurt countries by damaging
economic growth and making society poorer because once a tax is imposed on
anything, it increases the cost of everything.

If our retailers are forced to
implement a sales tax, they will raise their prices to pay the taxes, those who
buy their goods will have to raise their prices to cover the increased cost of
those goods and consumers will have to pay more for goods and services. It’s a
vicious cycle.

As a spin off, when the cost of
anything is increased, consumers will receive less.

They also tend to reduce economic
growth. Premier McKeeva Bush has repeatedly said that one of the ways the Cayman
Islands can get out of its financial slump is to seek more inward investment
from overseas companies. How are we to attract inward investment if we tax potential
investors out of the market?

Income and corporation taxes are
also bad for the Cayman Islands because they will translate into lowered wages
and job cuts.

It is imperative that we retain and
attract top financial businesses to our shores. If we begin taxing those
businesses, we will see them pulling up roots and going to other jurisdictions
that don’t have stringent tax rules. We would, in essence, be shooting our
collective selves in our collective foot.

We’ve already seen a handful of our
insurance companies pulling up stakes and going to industry friendly Ireland.
We really can’t afford to lose any more financial industry businesses in the Cayman
Islands and should be doing all we can to keep those we have here happy and
attract others.

Our leaders on both sides of the
aisle must come together and come up with an alternative to taxation; something
that will work for our country and keep the UK off our backs. And it won’t be
done by politically sniping and bickering.

1 COMMENT

  1. It is interesting to note that today’s editorial, while acknowledging the report’s conclusion about taxes, completely ignores the equally important conclusion that the government’s spending is out of control. Without saying so directly, the report condemns the government’s expensive “field trips” trying to drum up business while they should be concentrating on reducing public spending. The report’s statement that current spending levels are more than double any comparable jurisdiction should be headlined in the Compass, not ignored.

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