Colm: Tax doesn’t hurt growth

He said that in the United States from 1930 to 2012 the study noted a direct correlation between the top marginal taxrate and economic growth. “In the US, as the top marginal rate grew, growth grew. That is fact, not speculation,” Imbert said.

The bill approved a new taxrate for million-dollar earnings by companies and individuals, the seven percent tax on online purchases and a rise in the ceiling of Government’s bond-issues from $300 million to $2 billion.

Imbert defended the online tax, denying Opposition claims of legislative gaps. He said the bill says the “end-user” of an item is defined in the Electronic Transaction Act, meaning the online tax will be spared from a small business or a relative who brings in an item for someone.

“It’s crystal clear how this Act is to be imposed.” He rejected Opposition Senator Gerald Ramdeen’s complaint that the Government borrowed at a high interest-rate to reduce its overdraft.

“If he did two minutes of research he’d see the repo rate is 4.75 percent, the rate the Central Bank charges the Government on the overdraft. So once we borrow below the repo rate, we are borrowing at a lower figure than we are charged on the overdraft by the Central Bank.” Imbert said the Government borrows at 4.5 and 3.8 percent, below the 4.75 percent repo rate.

He defended a net “marginal rise” in the Public Debt, which had initially fell from $85 billion in September 2015 to $79 billion last April, with it now up to $88 billion (due to the Government’s US Roadshow to raise $7 billion).

He hit the former People’s Partnership (PP) government for raiding $14 billion from the National Gas Company, and spending billions of dollars in savings and in credit at the Central Bank.

“They bankrupted the NGC and took out money from every place they could find.” He said the PP had spent $7 billion from the Government account and ran up an overdraft of $9 billion, in total spending of $16 billion. The PP regime had also borrowed $30 million, plus $400 million by State enterprises