Bermuda has 23 per cent living in ‘poverty’
Bermuda's economic model and tax system is producing systemic poverty on the island, according to economist Robert Stubbs.
Mr Stubbs said that he estimated 23 per cent of Bermuda's population were living in “poverty” in 2017 or below 50 per cent of the median household income, which he described as a widely accepted definition of poverty.
“It is quite shocking when you see how we stack up internationally,” he said.
Mr Stubbs, previously head of research at the Bank of Bermuda, was making a presentation called “Bermuda 2017: Test Tube to the World” to a small audience at Bungalow 56 last night.
He insisted that Bermuda needed to raise substantially greater tax revenues over time, as well as raise more money from taxing capital income or capital stock.
“Unfortunately, we really need to raise our taxes for those who can afford it and are paid more to give tax relief to those who are in difficult circumstances,” Mr Stubbs said.
“I am making the argument that we are following a global extreme. The model we have does not work, especially when you have times of economic shock, it just breaks down.”
Mr Stubbs maintained that poverty had been a long-term issue in Bermuda.
“Taxes have a significant impact on human behaviour; if we are taxing labour and not taxing income, it is a disincentive for the creation of jobs and that is what we see in Bermuda,' he added.
“It also widens income inequality and it leads to tremendous poverty, which is a problem in Bermuda.”