Budget for the wealthy
THE EDITOR: Where in the 2006 National Budget is to be found the relief for the most vulnerable in our society? While Prime Minister Manning and his ministerial wife stand to jointly receive a windfall in excess of $3,000 per month because of the new personal income tax regime, what about those thousands and thousands whose only income source is nothing but government pension, old age pension, social assistance or some National Insurance benefit? The so-called Smart Card will not significantly deal with these persons, most of whom have never had an ATM card in their life, and being either of advanced age or illiterate, may not be disposed to learn how to use one at this stage of their life. In any event that card will be targeting persons qualified to be receiving (or should I say, who are supposed to be receiving) food hampers: food hampers which, as I understand it, such beneficiaries only receive for a three-month period. On another note, while the Budget states and I quote: "...Mr Speaker, recognising that ill health is both a consequence and a cause of a family’s inability to function productively, Government proposes to launch early in the new year, a community outreach family medicine programme that will bring primary health care to the doorsteps of families living in remote areas. This service will be conducted through the use of mobile clinics that will provide a broad range of health services inclusive of: glucose sugar screening, screening for hypertension, promotion of wellness and healthy living, general health advisory services..." Yet, when one scrutinises the list of foods selected for a reduction or removal of import duties one sees that, for: beef carcasses (high saturated fat) duty is reduced by 33.3%; pork (trichinosis, high saturated fat) duty is reduced by 25%; pickled pigs tails (high sodium) duty is altogether removed; salted and pickled beef (high sodium) duty is altogether removed; cod (saltfish) high sodium duty is altogether removed; coffee (not decaffeinated) duty is removed by 50%. Further scrutiny reveals that the food items which deliver good nutrition all still carry punitive import duties. So what is the real message? Is it not one that encourages citizens to eat unhealthy foods? And I’m here especially referring to those citizens who exist below the poverty level. Aren’t they the ones whose daily diet has a high content of the above items? Now, as one who has always spoken out against VAT (because any such flat tax is regressive in that a flat tax does not discriminate in favor of those least able to pay it), I must clamour for the preservation of a graded personal income tax system. Such a system has been preserved for corporate income tax, albeit the tax level is determined not on corporate income level per se, but rather according to the sector in which a corporation operates. By instituting a flat Personal Income Tax rate of 25% the wealthiest in our society, in real dollars, would be making a contribution to the National Coffers that is inordinately skewed in their favor. To prove my point let us look at the scenarios in four households which, but for monthly income are similar: In each there is but one breadwinner, who has three children, all less than 18 years, none attending a tertiary institution. Each breadwinner has expenditure related to monthly mortgage interest and monthly Credit Union share purchase, which respectively amount to 15% and 5% of the monthly income. The first breadwinner earns $4,000 per month, the second $35,000 per month, the third $100,000 per month and the fourth, $500,000 per month. Ignoring the relief brought by the NIS allowance, the measures in the 2006 Budget would in real dollars yield additional annual net income as follows: In the $4,000 per month household — $2,825 per annum; in the $35,000 per month household — $16,520 per annum; in the $100,000 per month household — $55,520 per annum; in the $500,000 per month household — $111,920 per annum. In other words, the gap in the net savings/expenditure potential between the poorer and the wealthier households is being made even wider in real dollars. What is the justification, be it social, economic, political or religious for giving a breadwinner who earns annual income of $6,000,000 a hefty $111,920 back in her hand at this stage of our country’s development. To me, it would have made better sense to incorporate fiscal policies and measures that encourage long-term savings and investment such as by increasing, not deleting, the allowances for mortgage interest, the registered annuity and co-operative share purchases, and by introducing similar concessions for net increases in the purchase of shares in listed companies. I was disappointed that the Budget contained no strategies whatsoever for the lessening of number of motor vehicles that are coming in to the country, and more importantly, for permanently removing all unroadworthy vehicles from our roads. The reality is that we simply cannot sustain the current influx. Our streets are clogged, the air and noise pollution is unbearable and the problem of the indiscriminate disposal of derelict vehicles and vehicle parts in intolerable by any standard. But, I guess that as long as the Tarouba Stadium et al go ahead full speed, all is well with the decision-makers. God bless Trinidad and Tobago. RICHARD THOMAS Arouca
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"Budget for the wealthy"