Editorial for 07 August: Generating fear with tax

The long experience of those who participate in and earn
their living from the international finance industry will tell that fear is the
most difficult thing to overcome when seeking to bring about economic recovery.

There are numerous examples of this over the past decade or
so, really since the September 2001 terror attacks on the United States. Fear
is a powerful motivator, and money runs.

Now comes this from our front page Monday: “We have lost
three sales, which we had deposits for since the announcement of a payroll tax
on expats last week. The combined amount for those sales was $1.3 million. One
was a home worth $345,000 and two others worth $485,000,” said Davenport
Construction owner Paul Pearson.

That loss of business may have cost a centre for performing
arts project at George Town Primary School hundreds of thousands of dollars in
private funding that was slated to come from Davenport. If businesses lose
money and have to tighten belts, philanthropic efforts are typically among the
first casualties. Simply the fear and uncertainty caused by the announcement of
a 10 per cent payroll tax on companies that employ expatriate workers who make
at least $36,000 per year has cost Cayman. There may be no better argument for
the implementation of this ‘community enhancement fee’ across the board, or
indeed for the elimination of the proposal altogether. Winning elections is
good and all, but if the methods used to do so end up crippling the country
politicians seek to govern, what’s the point?

 

1 COMMENT

  1. Financial stability within government is a vital component for a successful economy especially when that economy is in part dependent upon the offshore banking industry. Whatever could have possessed this government to believe that direct taxation was a viable solution escapes me.
    An analogy would be to pave 7 mile beach.

  2. The first step to re-building confidence in the country would be for the people to deal such a political blow to those that brought this idiotic idea forward that no sane politician would ever consider it again.

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