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Published: Tuesday | December 23, 2008
The Editor, Sir
The recently announced economic stimulus package by the prime minister is what the president-elect of the US would describe as "same old, same old". There is really nothing new in this package. Successive governments in Jamaica have based their efforts to stimulate the economy on the trickle-down theory.
The concept is centred on the idea that if you give concessions to the private sector, they will make more money, expand their businesses and employ poor people. This has never worked in Jamaica and will not work in the future. Private-sector interests will simply find ways to use these benefits to increase profits and their own standard of living.
No real impact
Apart from the general consumption tax (GCT) relief for companies with an annual turnover in sales of $3 million or less, there really is nothing in this package which will have a positive impact on the economy. The raising of the tax threshold, which is hailed as a benefit to the poor, will benefit everyone who pays income tax.
I dare to suggest that instead of resorting once a gain to the trickle-down theory, the Government should instead seek to stimulate the economy by putting more money into the pockets of the average Jamaican by lowering the income tax for workers earning less than one million dollars annually. This would increase spending, which would then improve the profits of private companies, thereby resulting in economic growth. This will improve the stock market and hopefully, some of these profits will be used to expand current businesses and start new businesses.
The muted and incoherent response of the Opposition demonstrates the similarity between the two major political parties. There clearly is a lack of vision with respect to solving Jamaica's problems and also, despite many words, a lack of commitment to the poor. Maybe it is time for a new, independent voice in this country.
I am, etc.,
A. MCDONALD
PO Box 2864
Kingston 8
http://www.jamaica-gleaner.com/glean.../letters1.html
The Editor, Sir
The recently announced economic stimulus package by the prime minister is what the president-elect of the US would describe as "same old, same old". There is really nothing new in this package. Successive governments in Jamaica have based their efforts to stimulate the economy on the trickle-down theory.
The concept is centred on the idea that if you give concessions to the private sector, they will make more money, expand their businesses and employ poor people. This has never worked in Jamaica and will not work in the future. Private-sector interests will simply find ways to use these benefits to increase profits and their own standard of living.
No real impact
Apart from the general consumption tax (GCT) relief for companies with an annual turnover in sales of $3 million or less, there really is nothing in this package which will have a positive impact on the economy. The raising of the tax threshold, which is hailed as a benefit to the poor, will benefit everyone who pays income tax.
I dare to suggest that instead of resorting once a gain to the trickle-down theory, the Government should instead seek to stimulate the economy by putting more money into the pockets of the average Jamaican by lowering the income tax for workers earning less than one million dollars annually. This would increase spending, which would then improve the profits of private companies, thereby resulting in economic growth. This will improve the stock market and hopefully, some of these profits will be used to expand current businesses and start new businesses.
The muted and incoherent response of the Opposition demonstrates the similarity between the two major political parties. There clearly is a lack of vision with respect to solving Jamaica's problems and also, despite many words, a lack of commitment to the poor. Maybe it is time for a new, independent voice in this country.
I am, etc.,
A. MCDONALD
PO Box 2864
Kingston 8
http://www.jamaica-gleaner.com/glean.../letters1.html