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April 21, 2008


Bob Knaus

You named the problem in your 3rd and 4th paragraphs, but failed to include it in your solution. The duty-based tax structure is the problem.

How long will it be before the Bahamas moves to a modern tax system? Duties are regressive. Duties oppress the poor. Duties are wide open to cheating.

I think most Bahamians would agree with what I just said. Why not make a change for the better?

drew Roberts

"Duties are wide open to cheating."

And what taxation system could we introduce that would not be wide open to cheating?

Wasn't there some talk of $410 million uncollected with respect to some other form of taxes?

all the best,



Children need to be taught as early as possible as much as possible about Money in the real world.

Then, MOST IMPORTANTLY, they need to be told just how much money you need to properly take care of a child!

I read an article about Haiti yesterday where the author was offered a child by a mother of 5. She said "I don't care. Just take him and feed him".

I could understand people like my grandparents deciding to have 5 or 8 children. They had boats to maintain, fields to harvest, fish to clean, water to carry. Many hands make light work. But in some areas of haiti where you have to stand on a 15 foot hill of nasty in order to see the nearest tree and you can't get anything to grow (and few even try) people are still foolishly having so many damned children.

If you can't feed yourself half the time why make another mouth to feed?

It doesn't matter if your in Haiti or The Bahamas or anywhere else. If you're broke and can't grow your own food, having a baby is a very stupid idea.

A friend of mine not too long ago racked up $14,000 in debt due to her pregnancy.
I feel a day coming when children will be born into debt.


Children in this country have been born into debt since the '70s
It is called National debt, and it stands at close to 3 billion.
3 billion divided by 310,000 equates to 10,000 per head.
Check my math it may be more.
By the way, a third at least are not productive people so the debt loat is higher on the ones who pay, The private sector.

Bob Knaus

Actually, Drew, different systems of taxation are differentially prone to cheating. Some more, some less.

The biggest thing that lowers the incidence of cheating is a broad-based tax with low marginal rates. A sales tax is an example of this. If you apply it to all goods sold, and set the rate at 4%, it is not worth the effort for most people to avoid it.

The next most important thing is vigorous, prompt, and impartial enforcement. Again taking sales taxes as an example, in Florida if you are 30 days late in paying your sales taxes the state will seize your business assets and shut you down. Draconian? Yup! But delinquency rates on this tax are quite low.

A sales tax is certainly not the only solution for the Bahamas. The Bloggy Boyz agitated for a European style Value Added Tax a while back, but finally gave up on the effort. Income taxes and property taxes are other alternatives. None are particularly pleasant, but all are superior to the current system of duties.



Is "the Economy" the buzz word this week?

Just an observation.



Hi Bob,

The thing with sales tax, is it decreases consumption. Businessmen would more than likely just add it on to the price of the good- and, a braod bases sales tax, does not control the border.

Also, 4% tax on bread, is not as nice as a 4% tax on jewlery and not as effective as a 4% tax on luxury and exotic foods- drinks and wines and spirits.

While a broad based tax system, sounds good on paper. In reality, it should never and can never truly work, other than its counterpart of price control. In fact, it is simply a variation of price control. Just that its through the back door; businessmen, would be steered into charging the same rate, as they do with gasoline, which has basically a flat tax, which is why their prices countrywide are virtually the same. Does not foster liberation and growth.

I have been thinking about the VAT more and more as I see the issues.

But, as you said, enforcement first and foremost!

In fact, no new tax regime until we fix the system we have now.


drew Roberts


are you on the ground here in Nassau much?

There are lots of people who would avoid the 4% sales tax...

Wink, wink, and all that.

As to the "vigorous, prompt, and impartial enforcement", well, there's the rub. We can't seem to do that with duty or property tax now, how are we going to do it with sales tax? And we don't need draconian...

And who wants more intrusive enforcers mucking about in our lives, some, perhaps, with their hands out and their fingers rubbing together?

The VAT is just as bad. Income tax as well. Not going to work if we can't get what we have now to work properly.

A "wholesale sales tax" might just work. You might need to limit the right to import in quantity to wholesalers only and keep wholesalers out of the retail game though. That probably wouldn't work. So, fewer points of control / entities to watch. Anyone have thoughts on this one?

all the best,



Mr. Butler, I am a student researching some information on poverty for a report I am writing. Could you please relay the link for the article you wrote on the contributing factors of poverty?


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