Posted on 06/05/2007 10:23:10 AM PDT by Shuttle Shucker
Details of the fiscal plan have not yet been released, but it will be based on key pillars such as the following:
*to increase tax income by diversifying income sources; *introduction of a flat sales tax (of perhaps 2%), with revenue to go to states and municipalities. This would help achieve the goal of increasing the local and state administrations’ tax capabilities *subsidies for the poor to relieve them from the anticipated already existing 15% FEDERAL sales tax's expanding to cover food & medicines *to end special tax regimes and exemptions on the federal income tax; and *to tackle tax evasion...
(Excerpt) Read more at viewswire.com ...
Can you believe how many countries don’t even have an income tax? Many are featured in the left hand column of:
A century ago the USA didn’t have one either. One was “temporarily” enacted for WWI. Like the recently abolished telecommunications tax (enacted merely to finance the Spanish American War of a century ago), it outlived its promised purpose.
Some would claim that a lack of taxes leads to a lack of prosperity. So I think it’s remarkable how the British Virgin Islands (which abolished its income tax in 2006) reportedly has twice the GDP per capita and half the unemployment rate as the neighboring U.S. Virgin Islands (which still imposes an income tax, U.S.-style). These links document it, in the Economy
section:
https://www.cia.gov/library/publications/the-world-factbook/geos/vi.html
https://www.cia.gov/library/publications/the-world-factbook/geos/vq.html
BVI’s interesting taxation (or lack thereof) is explained in greater detail here:
http://www.lowtax.com/lowtax/html/jbvpetx.html#income .
And BVI’s hardly the only place on Earth with investment-friendly tax laws, too. Bermuda has the world’s highest GDP per capita and a remarkably low unemployment rate. Like BVI, they have to let Brits relocate there even as the U.S. Virgin Isles claims that their having to let Americans in is the reason for their higher unemployment. Couldn’t be the taxes, of course!
Hopefully OECD pressures won’t continue to encourage countries to tax away prosperity while running up debt like the USA continues to do:
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm
Are there any “first world” countries left that offer a less-than-hostile tax climate? Times sure have changed, as this quote suggests:
“...it is the pleasure and pride of every American to ask ‘What farmer, what mechanic, what laborer ever sees a tax gatherer of the United States?’”
-Thomas Jefferson, 1805
The rest of the story:
...with controls on what non-nationals cannot do that no other jurisdiction in the world imposes. Lack of citizenship to newcomers except after 10 years of continuous and living-together marriage to a Bermudian, lack of citizenship to children of non-nationals, plus their consequences of inability to vote, inability to buy property except in certain circumstances only, are merely some of them. All these mean that for most non-Bermudians including all from Britain who come to Bermuda to work in jobs Bermudians cannot or will not do or want, there can be little chance of staying beyond their Work Permit term, with no security of tenure, no prospects of citizenship, no opportunity to buy a house or condominium at the same price levels as Bermudians...
Plus, it it is not true to say Bermuda has no taxes. It has no capital gains tax, true, but the other direct and indirect taxes it levies on managements, their staff, business visitors and tourists are many and they can be so very heavy that overall Bermuda's cost of living is one of the highest in the world, if not the highest, nearly three times more than in the UK and nearly four times more than in the USA. They include a direct income tax, in the form of an Employment tax, payable by employers and employees. It is based on what is earned from employment. It is currently nearly 15% with employers paying some and employees paying the balance. Bermuda Government Customs Duties averaging 35% of wholesale costs, translating into 100% or more at retail level, and Bermuda Government Annual License Fees on automobiles averaging $590 per auto. These are merely a few examples of why Bermuda has an appreciably higher cost of living than direct taxed and indirect taxed jurisdictions.
http://bermuda-online.org/economy.htm
I very much appreciate your insightful points but the 15% tax of which you write reminds me of the social security tax in the USA. The USA nevertheless has far more taxation underway. Even in Texas an annual car license is at least 10% of the amount that you mentioned, despite all the other taxes that Texans have to pay. And having a car on the island of Bermuda likely isn’t that necessary anyway. I bet they have public transit to keep the tourists coming. And if one’s self-employed there, in some sort of venture that only one as owner and foreign investor could engage then I’m not sure that even that 15% tax applies. Meanwhile, citizenship isn’t a prerequisite to a satisfactory life... But admittedly I’m speaking from a basis of ignorance and I of course welcome enlightenment.
Bermuda has certainly carved out a nice little niche for itself, but its not a model that would work for every country.
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