October 12th, 2013Dear Sir,I agree with many of the concerns of Jeremy Deacon in your ‘Letters to the Editor’ of October 12th concerning breaks for start-ups. It is not necessarily breaks that are required or looked for but basic fairness to allow a small business to function and grow. No one should be looking for a handout at the people’s expense but current legislation is hugely unfair for start-ups, small business and low income earners.Small business is acknowledged to be the engine of most successful economies and in good times, where banks are loaning money, full time jobs are available and there are plenty of people around spending money, the need for assistance may not be necessary. However, we are almost seven years along into the economic abyss and for many, who have limited choices but some creative skills and management abilities the only way to get a job today is to work for one’s self!The banks are not loaning money, hiring ‘part time staff’ with little or no benefits is the new norm, health insurance continues to escalate at an unsustainable level and deductions for pensions that current generations will never see should probably be considered fraudulent! And, as soon as you work four hours or more and you do not sign up for all the government taxes and required insurances and pensions, you are branded a criminal subject to serious penalties which you could not possibly pay! So you will have to go to jail! This is our society today … what happened to the love part?The very fact that our people are cutting grass and painting roofs and doing other minor jobs, using their skills and sweat, trying to get by, trying to pay high rents for inferior accommodations, trying to keep lights on and trying to put food on the table for their family, books and clothes for the children for school etc, there is nothing left in the wallet to pay full taxes, full pensions much less health insurance.This is the unfair part: the taxes and pensions and insurances are based on the ‘good times’ assumption that people are fully employed and putting in excess of 35 hours per week. There is nothing that allows those that may only be allowed or can only find work seven to fifteen hours per week. They still have to pay the full freight! Some people on part time work may work only 35 to 40 hours in a month these days and yet are expected to take a hit of four weeks-worth of deductions leaving them, more than likely, with no money at all — and nothing for his family! It’s a non-starter — as a result, there is a goodly portion of our population who can now be called criminals who are just trying to survive!Just what does the unemployed family do? Most are too proud to stand in line for a token handout so they find work. A few hours here and there and they bring home enough for the nightly meal, basic old fashioned medicine for the children and little else. Such activity labels them a criminal. Yet our politicians, virtually all of whom are earning two salaries and will get two pensions, cannot, in all honesty possibly feel that sort of pain, depression or the heart felt indignity and frustration of just scraping by one day at a time.The One Bermuda Alliance government, having discovered that there was no engine under the hood, has made positive inroads in trying to produce a positive climate in the international business so that jobs will trickle down for a very few of the more talented Bermudians with varying business degrees but for those that are below that level to the bottom there is so much more to do. Our people cannot wait for the international business to get back on track in 2016 or 2017 for some trickle-down effect!Small businesses need to be encouraged now and given a hand up instead of a foot on the throat, because the requirements by government for fragile start-ups and independent persons doing odd jobs for money are nothing more than that, a foot on their throat!We made a lengthy submission to the SAGE Commission on a number of subjects and one of these was this very topic. Unfortunately their mission was not broad enough to be as effective as it should have been so I believe the public will be disappointed not with what they come up with to try and save money, but what they could have come up with to help move the country forward in some new directions. The government missed the boat on this as we cannot wait for another commission to spend a year trying to find solutions to get people back to work!Basically, we believe that everyone should pay their fair share until retirement. However, to be fair to the low income earners, start-ups and small businesses it is essential to replace the flat tax concept and make it Proportional Taxation. If you only work 15 hours a week. you should only pay that percentage portion of the pensions, social insurance, etc which is completely fair and manageable for small business. It’s a matter of keeping costs down to a minimum and the proportional concept will make the costs fair and attractive for growth which means hiring more people.To encourage new start-ups we feel that such businesses of six employees or less should be free of payroll tax for their first three years and pay proportional social insurance, based on hours worked. For existing struggling small businesses they should be given the same deal starting January 2014.In the fourth year they should begin setting aside funds for the independent/private pensions and begin paying Payroll Tax at three. In the fifth year the Payroll tax would be raised to five percent and after that the normal tax rates, pensions and insurances would prevail for small businesses for six persons or less. We emphasise the number of persons instead of total salary remuneration for the payroll tax cut off levels to encourage the small business to hire more people. In our current economic climate we need people to be working, earning enough to help carry their load and appreciate the opportunity to be creative and productive.Government and the Chamber of Commerce need to welcome and provide a hand up through technical and business education assistance, not cash. We are all in this together and this should be a joint bottom up and top down effort. No one should be left behind.It is acknowledged that the best way to encourage small business to grow is to allow them to retain more of their hard earned capital by reducing their operating costs initially so they can build a proper foundation and then hire additional people and grow their business. At the moment the tax, pension and health insurance demands from government throttle small business: there is no plan to grow the tax base from the ordinary people so there are little contributions to the coffers and probably a lot of withdrawals from the social services.This set of proposals would not provide any huge amounts of cash for the government coffers immediately but it would generate jobs at the low income level currently being ignored. As the small businesses grow and become economically stable, they will be well placed to pay their share in the future.At the moment the government is not getting anything substantive from this sector because of the high costs of trying to get into business so it has nothing to lose and everything to gain. To get the people on board with this type of programme it should establish a four month amnesty to get everyone signed up no matter if they are a new start-up, an existing struggling small business or private contractors operating outside of the current laws trying to survive.It is important to bring everyone on board as soon as possible to determine what our real economic potential is for the future. We believe that this plan would go a long way to helping move our Island out of its economic doldrums. Sincerely,GEOFF PARKER SRWarwick