having a sale. Gibbons Company is having a sale. Trimingham's is having a sale. And other stores are having sales as well. Remember this is the height of the tourist season and Cup Match is upon us. There was a time when sales at this time of year would have been unthinkable; in winter to clear the shelves for new merchandise but never at the top of the season.

These sales generate cash flow but they do not generate anything significant in terms of profit. The old thinking that Front Street rolls in money is no longer true and it is beginning to seem that these stores stay in business simply to keep their employees in jobs.

This is all despite the fact that a good deal of cash has been spent redesigning the stores and a good deal of care has been taken to merchandise well and to keep the prices down to United States retail levels. Keeping to US retail prices was clearly an attempt to give visitors prices in line with what they could get at home, as well as bargains on such things as perfume and jewellery, and to encourage locals not to shop abroad.

These days Bermuda's retail sector competes with the major stores of America, the malls of America, mail order and the ever growing internet shopping. Major stores in the US are also constantly having sales of the same goods Bermuda sells which means that even regular US retail prices can be bettered regularly. Retailing is troubled in the US too and when you see Saks Fifth Avenue in trouble, things are bad.

Yet none of the US stores have the problems local stores face, import duties, Customs clearance, very expensive electricity and strictures on who they can and cannot hire. That combination makes it almost impossible for Bermuda's retailers to compete at a price people will pay. That is purely a local problem. Bermudians are driven away from Bermudian stores because of a situation created in Bermuda.

"Bermuda's too expensive. We'll shop overseas.'' Yet these stores are still called upon to provide a significant amount of the cash Bermuda's Government uses. Remember, good shopping is an important part of a vacation and retailers have also suffered from problems with tourism.

Yet there are large professional sectors of this Country, very successful and lucrative sectors, which are hardly taxed at all. They benefit from the more recent international company sector and are highly lucrative.

Somehow that does not make very much sense because it does not spread the tax burden and continues to tax those least able to pay and survive. It is the way the system has always been but that does not mean that today it is the right way.