EDITOR, The Tribune.

Permit me to respond to a few questions posed to me by G Minnis (Friday, January 21, 2022), in reference to my recent letter decrying the regressive nature of the Bahamian economy and proposing corporate and personal income taxes to fix it.

1) Is Mr Allen proposing a “socialistic economy”?

Depends on what you mean by that wrongly-maligned, over-used and under-grasped word. If you mean the progressive tax system that every developed country in the world (including the not-exactly-Marxist one to the northwest of us) has long adopted, then yes.

If you mean the present peculiarly Bahamian system of government-assisted profits for wealthy corporations and ‘free market’ misery for everyone else, then no.

2) Is CFAL not in the business of making profits?

Presumably, yes. But then, as I pointed out in my letter, so am I and many others. And there is nothing wrong with that. But does this mean it should pay no tax on those profits, which are made disproportionately from the spending of poor and middle-income consumers, who are themselves taxed on the spending side of the equation?

Again, the whole developed world says “no” (with the exception of a few crackpot rightwing politicians). So do all our neighbours. The only reason we ourselves are any different is because politicians have lazily permitted the logic of our “offshore” sector to seep into their management of our domestic economy, with the disastrous socio-economic consequences that we see around us.

3) But couldn’t CFAL, for example, just pay its directors huge fees and salaries to avoid the effect of taxes on corporate profits.

They could. But personal income taxes would then be collected from those same directors, rendering it a fruitless exercise, right?

4) But consumers always end up with the tax burden, because big corporations would just pass on the cost of the new tax as higher costs to the consumer, right?

Again they could. But if they did they would be quickly replaced by leaner, hungrier businessmen who absorb the new cost and take their business. That’s free market competition, is it not?

And no, consumers do not generally end up with the burden of corporate taxes. If they did, then wealthy corporations would not spend billions lobbying politicians to reduce or remove them and finding loopholes and tax havens to hide them, right?

ANDREW ALLEN

Nassau,

January 25, 2022.