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The Too-Little Too-Late Tax Breaks; In Memoriam
By FRANCISCO JAVIER CIMADEVILLA
June 10, 2004
We suppose it is better than nothing. In fact, some individuals may have fared better this year than last year when filing their tax returns.
But frankly, $100 million a year in tax breaks for the middle class means diddly-squat when the same folks have had to fork over $269 million a year in new excise taxes on alcohol, tobacco, and cars in each of the past two years.
Moreover, this years tax cuts dont even come close to making up for the tax cuts that had been legislated by the Rossello administration as part of its tax reform but which were eliminated by the Calderon administration to put "the government finances in order," as the latter would say.
More important, $100 million in tax savings for the middle class is just a drop in the bucket compared with the $1.4 billion that has been sucked out of the local economy in the last year as a result of military-spending cutbacks due to the shutdown of Roosevelt Roads and the scale-down of U.S. military presence elsewhere on the island, rising unemployment, higher excise taxes, and skyrocketing energy prices.
So, while middle-class tax cuts usually have a stimulating effect on the economy, we arent too hopeful that will be the case in Puerto Rico this year. Its just too little, too late.
It is the perfect time, however, for gubernatorial candidates to articulate their commitments to true tax reform when the new administration comes into office next year.
New Progressive Party candidate & former Gov. Pedro Rossello is already on record on the sweeping tax-reform changes he would push if elected. Popular Democratic Party candidate Anibal Acevedo Vila said he wouldnt have his tax plan ready until next month. We will await his proposals.
Even in death, the figure of former President Ronald Reagan looms larger than life.
Today, as the nation feels uncertain about its economic prosperity, fearful about its internal security, and confused about its leadership role in the world, the memory of a president who, with enormous self-confidence and a clear sense of direction, almost single-handedly raised it from greater despair a quarter-century ago should be inspiring to its current leaders and reassuring to all its people.
When, at 70, he assumed the presidency of the U.S., Ronald Reagan faced up to far greater challenges than the ones threatening us today.
The nation was immersed in the deepest and longest economic recession it had seen since the Great Depression. The height of the Cold War with the Soviet Union threatened the annihilation of the civilized world; any trigger of the superpowers nuclear arsenals virtually assured mutual destruction. The aftershocks of Watergate had shattered the American peoples trust in their government. Respect for the U.S. around the world was in shambles; Islamic fundamentalists were already waging their undeclared war on us, keeping 52 of our fellow citizens hostage in Iran for 444 days.
By the end of Reagans eight-year tenure, the nations economy had recovered, its military defenses had been rebuilt, and the U.S. had led the West to victory in the Cold War. It was a shining moment in 20th-century American history.
The reasons for Reagans success are many and complex. But it was his personal leadership and his ability to articulate a renewed commitment to the time-honored values upon which the nation was founded that won the day, the decade, and, indeed, the century for the U.S.
May he rest in peace.
This Caribbean Business article appears courtesy of Casiano Communications.