Mr. Gowon Bowe, president of the Bahamas Institute of Chartered Accountants (BICA), "told Tribune Business that the consumption-driven nature of this nation’s VAT-reliant structure meant those on lower incomes continue “to bear a disproportionate tax burden” in comparison to their wealthier counterparts."
Of course this reasoning is often used when governments are looking to increase taxes instead of lowering spending.
Yet, one study points out that "A Flat Consumption Tax Would Be Fair and Efficient."
The study found that "The economic benefits to Americans at all income levels would be immense once Congress implements a consumption tax. The empirical data show that a consumption tax could increase the size of the economy by about 15 percent over 10 years."
In other words changing the tax system to one of income tax could possibly slow the economy even further as more people decide it is not worth investing in the economy.
There are no easy answers but surely the government should remain committed to spending within its means first and foremost.
Public Policy should be about deriving the best results for everyone over the long haul. Rhetoric about income equality should be left in the dust bin of history and the debate should be centred on economic growth and how best to accomplish it.
