Payroll Tax Tabulated: Thursday's paper was interesting to read, lots of political posturing and rhetoric, along with some serious concerns about the wrong turns in direction that our country appears is taking. The concerns are real and worrying, the political posturing, just more of the same verbiage, reworded, recycled, revamped, but still rhetoric.

However, one proposal that really caught my eye was the announcement that one political party wants to exempt those earning below $42,000 from payroll tax, thereby saving each of these lower salaried workers approximately $1,995 per year.

Thus, taking a household where both persons in the relationship meet the income earning thresholds, these households would be $3,990 richer.

If one defines the term rich, however, two incomes barely reaching $84,000 per year gross payroll - not take home pay - is not rich in my book or Bermuda. I seriously doubt that it is in anyone else's either, especially for those living such a descriptive statistic.

The concerns expressed by this proposed "bold and unprecedented" plan range from "fuelling inflation", to "stimulating lower income consumer spending."

Having written about this subject on more than a few occasions and being a complete cynic by experience and training as a financial professional, I seriously question that lower income families desperately struggling to get by, are going to suddenly rush out and spend these dollars on anything but necessities.

To begin with, these individuals will not be receiving their payroll deduction as a lump sum at year-end. In reality, they will see a slightly higher net check at the end of each payroll cycle. Let us see: rounding $1,995 up to 2,000 dividing by twelve payroll cycles, we see the princely sum of $166 dollars extra per month.

Inflationary pressures. Has anyone closely checked the cost of ordinary food items lately, or are we all so numb, we do not look - just hoping we have enough cash to checkout?

I don't know how you feel, but we already have plenty of inflationary pressures. Our environment has been knocked back and forth with the increased currency exposure and rule-breaking cost of oil (and shipping).

Regular weekly staples such as bread, milk, orange juice, cereal, yogurt, chicken, and rat cheese (New Zealand orange block cheese) are not gourmet treats.

For years, and until recently, evaporated milk priced at 69-89 cents per can, while the cheapest cheese on the market, the cheese our family was raised on, hovered around 3.50 per pound. What are those prices today? Almost double. Inflation is already with us. Those families receiving small relief on their hard-earned wages will most probably spend the difference without even realizing it on increased food prices.

Disproportionate tax burden. Everyone else likes to think of us as a no-tax charming sort of place.

The truth is that there are plenty of taxes here, hardly any of which are assessed on a progressive threshold basis.

In Bermuda, a lower income earning family with a combined gross income of $84,000 trying to work their way up into prosperity, still pays significantly more in taxes per capita than a career professional, some 20 percent of their annual income.

Divorce (the biggest cause is still money issues within the family) is one of the most punitive taxes out there if any sort of family property is involved.

You are taxed to convey it to both names and taxed again, most costly and significantly, to convey it out. Stamp tax is assessed on everything it seems.

And let's not forget the outrageous tax on Bermuda dollars, that combined with the bank currency processing charge, now makes each and every dollar worth just about one percent less than one hard currency US dollar.

The totally inequitable consumption tax is morally the worst, disproportionately hitting those the hardest who can afford it the least.

Bermuda's consumption tax is an escalator tax, becoming significantly larger each time an item is passed up the sales chain, from docks to wholesale distributor to retail store to consumer.

To wit, instead of taxing at point of sale and collecting at the cash register, once the goods are sold, the consumption tax is levied first in line - months before the items hits the consumer shelves.

One could find it justifiably tolerable, since it is a foregone conclusion that government must raise operating dollars in various formats, but the fact that the consumption tax includes everything to hit these shores, including food, life's necessity is appalling. Let's at least get rid of the import tax on food.

How will this all be paid for? Estimated to cost the public purse about $29 million, the payroll tax cut had a revised budget chart showing reductions in government travel, consultants, communications etc.

Here is another idea. Eliminate the government department of tourism, annual budget of $35 Million, and pass the authority back to the commercial tourism sector operators.

They know better than anyone how to market Bermuda or they would have been out of business long ago. So, let's see - 35 million minus 29 million leaves us Bermuda residents with, well, you guessed it - a surplus. How is that for a Christmas present?

The author is not a member of any political party. She votes by her conscience.

Martha Harris Myron CPA -NH1929, CFP® -67184 (US licenses) is a dual citizen (US and Bermuda). She is a Senior Wealth Manager at Argus Financial Limited, specialising in comprehensive financial solutions and investment advisory services for individual private clients and their families, business owners, endowments and trusts. DirectLine: 294 5709 Confidential email can be directed to mmyron[AT]argusfinancial.bm

The article expresses the opinion of the author alone. Under no circumstances is the content of this article to be taken as specific individual investment advice, nor as a recommendation to buy/ sell any investment product. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.