Editorial for May 18: Fishing and direct taxes

‘Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime’.

This old Chinese proverb has been repeated by several of our politicians recently, and the message it contains is sage. Certainly it is better for any society to teach its members how to provide for themselves rather than give them government assistance.

That point should be apparent more than ever now that it has been revealed the government expended some $19 million in 2010 in providing almost 8,000 people – nearly 15 per cent of the population – with some sort of financial aid. These figures do not include the efforts of Cayman’s many service clubs, churches and other charitable organisations that spend significant amounts assisting local residents, including some not helped by the government.

What is particularly noteworthy about those staggering figures is that they occurred in a year when there were no natural disasters that would have typically necessitated widespread government aid.

It is true that Cayman was – and still is – feeling the effects of a prolonged economic downturn, but most people can cut back on their expenses during tough times so that they don’t need government aid.

Minister of Community Affairs Mike Adam vowed last week to “not leave anyone behind” and, when it comes to people who truly have needs in order to subsist, we agree.

However, we have to wonder what kind of checks and balances the government has in place to ensure all of the nearly 8,000 people getting assistance are truly in need and not taking advantage of the system.

Financial aid, after all, should be reserved for those in real need, and should not just be a way for people to maintain the lifestyle to which they’ve become accustomed.

The problem with government aid is twofold: Firstly, it tends to make our society less self-reliant in general. Secondly, Cayman doesn’t have the means to support it. Other countries that give substantial financial aid to its citizens also have direct taxation to finance the expenditure. Unless Cayman starts teaching more of its people how to metaphorically fish, it will have to start teaching them the details of direct taxation.

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2 COMMENTS

  1. It seems that the proportion of Caymanians receiving aid must be higher than 15%. About half the population (rightly or wrongly) is non-Caymanian.

    My understanding is that they would be kicked out if they cannot support themselves. Logically thus there should be zero non-Caymanians receiving aid
    If you exclude them from the calculations one has 30% of Caymanians receiving aid.

    Could this be correct?

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  2. Longtermresident

    Good observation…

    You’ve noticed that the editorial did not differentiate between the categories of the population, while…

    In every single area of Caymanian life, the population is divided between Caymanians (born), ststus Caymanians(people with Caymanian status)and legal residents (people with the right to reside)and expatriates (all work-permit residents).

    Now when you look at the immigration laws that govern each of those classes of people, we know that the only class of people who have any right to government assistance are born Caymanians and Caymanian-status holders (who are considered legal Caymanians in all respects).

    So, logically, it must be Caymanians who are claiming this assistance because they are the only ones who have any right to it.

    Therefore, your calculation of approx 30% is much more accurate because Caymanians, including status-holders, number around 28-30,000 of Cayman’s population.

    These figures are only approximates but by any calculation, 8000 Caymanians depending on government assistance represents a growing welfare state, not just assisting a few people in need.

    30% does not even come close to countries where taxation pays for a benefit system, such as England, Canada and the USA.

    Link these figures to the rate of unemployment for Caymanians, who again are the only class of people who should be termed unemployed, and you see a fuller picture.

    Again, the immigration laws in Cayman state that if a person who is on a work permit is not in work, they should not be in Cayman so it is safe to assume that not many work-permit expatriates make up the un-employed numbers.

    Link this with the high rate of crime, mainly robbery, and a total picture begins to evolve.

    What this picture shows is that the economic and immigration policies pursued over the years have failed dismally and if a new path is not pursued…

    Cayman is looking at becoming a failed state in just one generation.

    There are only two options, abolish the discrimminatory immigration/economic linked policies and system and create one population of legally resident Caymanians, with proper border control or…

    Introduce a direct taxation system that taxes each and every resident of the Cayman Islands, Caymanian and non-Caymanian, according to the levels of their income.

    Another thing to consider is that to tax a population, that population has to be legal, taxable residents of a country, with all rights to all tax benefits so taxation would necesitate a change in immigration policy anyway.

    Its up to the Caymanian people to decide which is the more palatable option.

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