Tax businesses more, say Christmas shoppers
Monday 21st November 2011, 2:29PM GMT.
BARGAIN hunters want businesses to pay more tax to ease the burden on the individual.
Islanders have spoken out following the release of the 2012 Budget, which announced duty rises on petrol, alcohol, cigarettes and tax on real property (TRP).
Deputy Dave Jones (pictured) has condemned the Budget, saying it was an attack on families already struggling to cope with rises in the cost of basics such as electricity, food and water.
And many islanders have agreed with the Vale deputy’s comments, including Michelle Woodgate, 26, who was at a Christmas fayre at St John’s Residential Home on Saturday.
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“BARGAIN hunters want businesses to pay more tax to ease the burden on the individual.”
How naive! the businesses will be taxed more and their prices will go up and the individual will be indirectly paying the tax increase.
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Well said Deputy Jones.Yet again business gets away without any significant (property)tax increases.
With Zero-ten still in place,the business world seems to be living the life of Riley at the workers expense!
….still waiting for the ‘trickle-down effect’ that is supposed to happen with low taxes for business – perhaps some clever economist can let us know when we can expect it to happen!
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Roll eyes.
You don’t need to be a clever economist to know there is a trickle down effect.
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Sorry Scarpia, you might be waiting some time. A leading economist says it does not exist. Those at the bottom of the pile, have seen thier income rise,slightly. those at the top have received stratospheric pay increases, dispite leading most of the world into recesion. The rest of us seem to be treading water and are likely to do so for (add your own number here) Years. The money stays at the top. There is no trickle down. Be it personal wealth or company profits.
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Your looking at it in a very narrow way.
People with high incomes that work in Finance Industry or any other industry have higher disposable incomes.
They spend this money on goods and services that provide jobs in the community. (Not to mention the number of jobs the finance industry provides in itself). The number of unemployed would be much higher if it wasn’t here.
I doubt there would be so many beauticians/hair salons/luxury car garages/shops with candles in that cost more than £10 that with otherwise. This is a trickle down effect in itself.
Another example: the taxi industry. All the big firms have accounts with them. Caterers do a lot of work with them. Construction workers getting paid from house rebuilding/decoration. Restaurants with all the corporate do’s and client dining. This increases both personal and company profits in other industries.
You forget as well the employees all pay income taxes and social security in proportion to their salaries. Putting more into the pot for other people to take out on lower incomes that need support in the community.
It is actually a good thing that states members can take this into consideration. If you tried to get every penny you think the finance industry owes YOU it would move and take all its benefits with it.
Whether it contributes in balance enough to our society in itself is a good question to raise but to say it does not benefit everybody is incorrect.
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Dani,
Yes there is some trickle down effect from finance but at what cost to the 70-odd % of people that don’t work in it?
In my experience a lot of the high earners are not particularly keen to part with money and those that do very often spend it elsewhere.
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Kevin
I have explained the benefits of the finance industry to those outside it for you already. There is a greater trickle down effect from it then you personally feel. On that we would have to agree to disagree.
I would say that I think the rise in house prices is fueled by a large degree by the finance industry. Not bad if you already own your own home but if your a first time buyer it can be a struggle. Although I think baby boomers buying up property as a pension device also adds to this problem. I think this is a downside of the finance industry on others in society.
Further examples of its benefits is the level of revenues that it brings in. It is the greatest provider of income to this island, by far the greatest contributor to the economy. All the new schools, social housing and hospital development would probably not have been funded without it. Tourism and agriculture do not bring in that kind of cash.
I would like to address your image of those that work in the industry as well. Most of them are just normal people that have studied hard and worked hard to get where they are. They want to go to work, make bank and go home to their families afterwards. They do jobs that require a high level of knowledge, stress and variety of skills to be carried out and should be fairly paid for this. Don’t let the media’s completely biased view of the industry warp your own perception. Its in their own interest to get you riled up.
There is an issue of directors being paid increasingly inflated sums, but there can only be so many directors in an industry. The vast majority are not being treated like this. As you have said above what you base your assumptions on is what is happening in the UK. We don’t have the information to say this is definitely happening in Guernsey.
Why don’t you get hold of accounts released by companies you believe may be acting in this manner and see if their directors salaries are disclosed, and examine their pay increases of the last few years to see it your viewpoint rings true? Or perhaps ask the local media to investigate this issue further?
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Great idea! then even more people will shop on line and there will be less tax from businesses.
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The finance industry for the most part are zero rated for tax. That’s where we should be looking rather than hitting the lower end of the earnings market all the time.
Now I know we must remain competitive, but surely its not beyond our politicians to get together with Jersey and the isle of man and come to some agreement on an improved version of zero ten where a rate of say 10% could be used instead of zero. It makes logical common sense to me, but there again I’m not an expert.
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Agreed. I’d love to know the sort of money we’re talking by even taxing 5% corporate tax.
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Mikey is so right.
The more costs the business has to pay, the more it will charge its customers.
Why do you think there are so many empty shops? TRP increases is one major reason.
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Being as that nearly all taxes are collected on a percentage basis, any raise is indicative of a demand for a bigger slice of the pie, regardless of who is taxed.
There is a point beyond which taxing doesn’t work. Guernsey is already beyond that point.
What is lacking is people in place who really know how to run things. They are here, we just need to vote them in.
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Is 2011 the new 1788?
New York, London, Paris, Munich
The gap between rich and poor – is toxic.
The above is, unsurprisingly, the chorus that did not form part of M’s 1979 hit “Pop Muzik”.
A few weeks ago, a senior politician was congratulating the States (well, himself, really) that Guernsey had avoided the effects of the global financial crisis. Subsequently, the swift removal of LVCR has dramatically reversed any such notion. Further, another period of UK/European recession looks possible – a matter which is likely to adversely impact the Guernsey economy.
In periods of low or negative growth, other things remaining equal, the the relative gap between rich and poor gets larger. Added to this, 2011 has seen large increases in utility bills and a budget which hits the lower paid in a disproportionately higher manner than the rich. Even the TRP rise will probably hit rent payers more than property owners because many leases pass this cost on to the tenant.
This is a dismal prospect for many islanders. To make matters worse, over the last few years, the political class to have deemed it necessary to secure a raft of preferential tax rates for businesses (did I say preferential, I meant 0%). I know its old news but I still can’t believe it.
Similar occurrences have occurred in the past. In 1788, France’s public debt had reached crisis level (sound familiar?). At Grenoble, the townspeople grew so incensed by both the refusal of the elite to surrender their fiscal advantages and the arrival of the army to collect further taxes from the masses that they hurled tiles from the roof-tops at the soldiers below. This episode became known as the “Day of the Tiles”
We all know what happened in France in 1789. Let’s hope that Guernsey doesn’t suffer a stormy winter and that all our roofs remain secure.
If only M were still performing. They could have had another hit.
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Better to tax the finance industry rather than local businesses.
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Mr G, you can’t tax something that isn’t here and that’s the problem with your proposed suggestion as finance will leave. All moral argument aside in terms of the gap between rich and poor if finance related companies are placed in an even more uncompetitive position on the world stage then they will disappear along with the employment and trickle down they provide. If I don’t have clients paying then I don’t have a job and I don’t spend in the shops, get a plumber in or buy the Press. Oh me and 100s of others. A difficult balance to get right in terms of income raising by the States but perhaps we should focus on how they spend our money instead rather than where it comes from?
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And herein lies the problem ABod.
The powers that be have focused so much on and bent over backwards for the finance companies and forgotten about all other sectors that could have also supported the island had they been given the same treatment. NOW Finance have us by the short and curlies and know that should we DARE to be so presumptious and demand they pay their fair share and help ease the burden of costs being put on to the “lowly” tax payers they use scare tactics by threatening to up sticks and leave…….EXACTLY what is going to happen with the big companies trading over here when the LVCR becomes non-existent!
Commerce of Employment was quick to boast about the benefits of allowing big companies etc into the island and what they would do for Islanders and how they bring in, jobs buisiness blah blah blah but they don’t stop to think whatever these companies make goes back off the island and doesn’t benefit us at all in the end, or how it effects the local businesses who are now going to be dragged under because the bigger fish have exploited us and taken the P…. out of a system which has helped small local businesses compete with such large UK/overseas companies for years! These Money Moguls will take their profits and and set up elsewhere leaving behind pretty much a broken island. :(
Someone mentioned the other day that the growing industry ect was hard labour in the fields and people would not work like that over here (well they had no choice once)! ….but they may just have to get off their fat arses and do so again in the near future. ….that’s the trouble really …it’s modern people! They have grown lazy and would rather earn fat salaries and huge bonuses working their way up into bigger comfier chairs in the finance industry. They have been brought up in a world where everything is more or less done for them on a computer or a calculator….look at how many shops have to turn people away when their computers and tills crash because they don’t know how to do things the “original way”! Makes me laugh!!
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All this discussion, but you know when the States are conning you, because they tell you it’s for the good of the Island.
They tell us what we want to hear, then do the opposite, just as they always have.
I rather think some of the Sitting deputies may by scanning the jobs market right now, in time for the next election.
As the Who once said ‘Wont get fooled again !’
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