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Tax
Protection for the weakest - Jersey Taxation should be fair, easy to understand and simple to administer. Primarily, though, taxes should not place further pressure on the weakest members of our community. If anything, taxation should be skewed, in order to redress the growing divide between Jersey's better off and the more disadvantaged. Unfortunately, the price for retaining Jersey's financial services industry will be increased taxation to cover a massive drop in corporate tax revenues, estimated at over £80 Million.
GST - Three years ago, I was vigorously opposed to the possible introduction of UK style VAT - at around 17 percent, with numerous exemptions. Now, having closely studied all the alternatives, I support proposals for a General Sales Tax - at 3 percent with no exemptions, this is based on the same principles as VAT, but is a substantially different tax rate. It covers the largest pool of contributors at the lowest rate (the most painless option) and offers the least risk to the Island's economy.
Social Security - Alternative proposals to lift the cap on Social Security payments are deceptively attractive. Firstly, this changes the system from an insurance scheme to a tax. Secondly, like all payroll style taxes, it only impacts on people in work. Thirdly and most importantly, it raises the costs of doing business in Jersey, either by directly adding to the employers costs or by increased wage demands. Thus it features as the type of tax that might persuade a large company to relocate, or not come to Jersey in the first place.
Graduated Income Tax? - The other major alternative is graduated income tax. In a global environment that is increasingly adopting Jersey's style of flat rate tax, in some cases at lower than 20%, to follow the reverse trend is positively dangerous for the local economy.
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