Vexed highlights this interview that Dr. Brown has given to the BBC, where he discusses Bermuda’s current economic situation. While Vexed doesn’t explicitly adopt any position on this interview, I get the impression (based on the section he quotes) that he is opposed to Dr. Brown’s statement on income tax. Personally I support the adoption of a progressive income tax, although I recognise that it’s adoption would have to de done skillfully, at least under our existing economic base. I believe though that it would be a mistake to read to much into this statement by Dr. Brown; I think it is highly doubtful that Dr. Brown, or the PLP as it currently exists ideologically, are going to start advocating an income tax policy. I imagine that the interviewer asked Dr. Brown about the possibility of introducing income tax as a result of the current economic crisis facing Cayman.
Cayman approached the UK for permission to accept some bank loans to assist it with its current situation and the UK turned them down, arguing instead that Cayman should investigate adopting, amongst other reforms, income tax. I’ve been meaning to post an article on that situation, but it has been stuck in ‘draft purgatory’ having gone off on a tangent about my experiences in Cayman during the Regiment post-hurricane Ivan restoration operation. Basically I wanted to say that the UK is acting rather hypocritically on this issue, as the banks were willing to assist Cayman and the permission from the UK should have been a mere formality than anything else. And with the UK bailing out sectors of the British economy, as well as looking for assistance from the IMF, hardly has the moral authority to criticise Cayman in the way it did (especially effectively undermining the economic basis of the country). Anyway, the relevance of this to the statement of Dr. Brown on income tax is that in rejecting Cayman’s request for permission, the relevant official told Cayman that it should adopt, and this understandably sent shockwaves throught the business world.
While Bermuda’s economic situation is by no means as healthy as it could be, from what I understand on the basis of current reports (and my own observations from Cayman), Bermuda is no where as critical as Cayman is.
While Vexed seems to have found the section referring to income tax to be the most interesting part, for me it was Dr. Brown’s statement on gambling that I found particularly interesting. This section reads:
Dr Brown believes the role of smaller, low-tax countries is misunderstood by bigger, richer nations.
“The financial activity of these companies in places like Bermuda is really beneficial to the countries onshore. In the US, for example, we commissioned a report which indicated there is great benefit to the United States in having companies based in Bermuda,” he said.
“These companies are sufficiently strong financially to be able to pay claims after catastrophic events like [Hurricane] Katrina or 9/11. There’s also an impact on jobs in the US that result directly from Bermuda-based companies,” he added.
If the US attempt is successful, Dr Brown says his government will have to look at other ways of raising money, including trying to set up a gambling sector.
While the statement on income tax seems to have been a direct answer to an explicit question on income tax, the statement on gambling comes across as voluntary. This is hardly surprising, as Dr. Brown is well-known to be very much pro-gambling, with his infamous attempt to sneak gambling legislation through the house a few months ago being of particular note. I do wonder though if his statements on gambling to the BBC and also in the Bermuda Sun today are a lead up to a new campaign of his to ensure gambling legislation is passed in the next parliamentary term, or at least before he steps down in 2010. I am sure the gambling’s taskforce report (which was completed in August but not – as far as I am aware – been made public), is going to resurface shortly as well.