The smart students have all figured out that GST is failing us all. It is devastating our economy, morale, and social fabric. And, they bullied our democracy right into the hospital after the last election, and then battered it into Intensive Care the night they forced GST into law. So, after a long school break, let’s ease into the new semester with a True-False Maths Quiz as a GST refresher! First question…
1. True or False? Our tax burden increased 81% from 2010 to 2013.
False. Earlier! Our tax burden increased 81% from 2004 to 2007. It has continued to increase ever since.1
2. True or False? Our tax burden grew from $63 to $246 Million/year ? with British approval!
True. Budgets are “laws” governors must sign (i.e., appropriation bills). They have assented to budgets with new and higher taxes year after year.
3. True or False? In 2023, Property Taxes will pay for 5% of government spending.
False. Less! Property Tax projections are ~$10 Million ($9,622,174EC). That’s ~4% of spending, but the class chatter makes it sound as if they pay for everything.2
4. True or False? Instead of helping government lower costs and pay debt, they sent Tax Consultants to impose new taxes, like GST – and force the People to keep paying more!
True. While wages, business revenues, and tourism were about the same – or fell, due to the recession, Irma, and Covid, government passed laws for 4x as many taxes.1 Instead of managing costs, Tax Consultants focused on forcing People to pay more taxes, like GST!
5. True or False? GST was imposed to fill a “gap” of $70 Million per year.
False. Far less! Tax Consultants presented a $22 Million “gap” to “justify” GST – with the borders closed! To make up for fiscal mismanagement, GST was forced on People who were forced to make do.3
6. True or False? After promising to “curb” spending, government staff increased from 949 to 1,217.
False. Even higher! Since the last election, government staff increased almost 40%, from 949 (2019 Actual) to 1,313 (2022 Actual, +38%).2,4 With most businesses struggling, considering leaving, or just closing, we need a balanced budget law – or we risk becoming a failed state unable to get extra credit.
7. True or False? There were alternatives to GST – and still are.
True. GST was imposed in the depths of Covid. The most obvious “alternative” was to keep existing taxes and open the borders. Upon reopening and before GST, the original taxes far exceeded the “gap” (over $25 vs. $22 Million). GST was unnecessary ? and ultimately forced everyone to pay six times what was expected.2
However, even with closed borders, government kept taxing and spending, without sharing sacrifices the People were making due to lost jobs and wages. Another “alternative” was to freeze budgets and cut or defer ~10% (to offset the “gap”). Spread across dozens of departments, “curbing” spending was a fair approach, which could have been done over time, without a layoff.2
Bonus answer: Adjust existing taxes! Over 100 taxes, fees, and levies could have been adjusted to fill that “gap”.2 This alternative would have also preserved civil rights lost to GST ? and saved administrative costs for businesses and government.
And… Existing taxes would also have scored higher after reopening, especially without GST deductions from accommodations. Early trends also suggest long-term impacts, from erosion of tourism, future occupancy, and gratuities, especially in restaurants, and from increased crime driven by regressive taxation. Businesses and villas are also exiting the economy and employing fewer people, leading to lost wages, lost jobs, “ferry” shoppers – and lost residents through emigration. These factors appear on track for contraction once the rebound from reopening borders resolves.
8. True or False? “Services” like lawyers and restaurants were not paying taxes before GST.
False. A business doesn’t have to “collect” taxes to pay and pass them on to customers. Our taxes are “broad-based” with few exceptions. Paid by everyone, about 50 cents of taxes are passed along in every dollar we spend. Lawyers – and just about every other business, pay duties and fees on all equipment, furnishings and supplies, work permits, the Levy, property tax, business and vehicle registrations, electricity, phone and internet taxes. Restaurants pay ? and pass on to patrons – duties, fees and excise taxes on food, beverages, supplies, plus liquor and food handling licenses, fuel surcharges on tankers of propane, and many more. Most important, “service” sector members have always employed others to pay their share – and attracted visitors, clients and patrons to support the economy for decades – before GST.
9. True or False? If government saved just 4 cents per dollar, GST could be removed from restaurants and retail (especially, grocery stores!)
True. GST is upsetting restaurant patrons and making it hard for “retail” customers to make ends meet – all for less than a few cents of every $1 government spends ($4.8 and $3.99, respectively, vs $246 Million budget). Thus, restaurants and stores could be exempt if government saved 4% instead of forcing tourists and shoppers to pay 13% more!2,5
10. True or False? Since 1999, government has taken $4 Billion EC from the People for the same services.
True. Given 2023 projections, government has taken over $4 billion for about the same population and services since 1999 ($4.1 Billion, with barely any inflation before 2022).1,2,5 Extra credit: How many houses, cars, college educations, new businesses, or even travels have the People sacrificed so the government could spend whatever it wanted and keep passing laws to force the People to pay more? And remember, that law says they can change GST to any amount any day! (Hmm. One more for extra credit: Did the British really change “Change Can’t Wait” to “GST Chains Can’t Wait”?)
Time’s Up! The Substitute is Leaving the Class!
Pencils down. Check your answers and sit up straight! As the new semester gets started, our substitute teacher is going home. Teacher Julia is due any minute. Will she fail us all, or pass this test? We’ll learn a lot by whether she pays her respects to our dying democracy at the hospital on the way to her first day of school.
Repeal GST – and pass a balanced budget bill. Now!
This article reflects cultural and economic issues raised on July 5, 2021, at the House Select Committee on GST Public Hearing. 1 2000-2023 GOA Budgets; 2 2023 GOA Budget; 3 Slide 4, Retail and Wholesale GST Consultant’s Presentation (2021); 4 2020 GOA Budget, p.81; 5 GOA Facebook Post, “GST Performance,” (11 July 2023)
