Do not persecute the average worker by raising tax 10%
Dear deputies, I impore you, please do not raise income tax by 10% in this year’s Budget. Please do not increase the tax burden on Guernsey’s working classes like this. As you vote for ever-higher spending, just remember they are still suffering from the cost-of-living crisis, high interest rates, high energy prices, high ‘you name it’ prices.
Many working families are just struggling to cope with the very high cost of day-to-day living in Guernsey. As Island Global Research reported this summer, over the last year, half of Guernsey households have struggled to fund just their basic living costs.
So do not punish these people for your failings.
Do not make them pay for your largesse.
Do not insist they make up the corporate tax shortfall (of others).
Do not persecute the average working Guernsey man and Guernsey woman in this way. They have carried the burden of zero-10 for too long.
Raising the personal income tax by 2p in the pound will mean a Guernsey worker on an average wage will pay 10% more tax and social insurance contributions than a worker on the same pay in the UK. When I came to the island in 2008, a Guernsey worker on the average wage paid 20% less.
That will be your legacy.
Increasing income tax like this is a lazy, crude and cruel tool, and these proposals display no sympathy or empathy with the average worker. Increasing the concentration of the tax burden on these groups is not a fiscally competitive move – and it for sure is not a fiscally fair move.
Despite what may have been said during your debate this week, nor is it a fiscally responsible move. Reducing workers incomes by such a large magnitude makes for bad economics.
Neither does it do anything to address the structural deficit, as has been exposed during the debate, it is to fund higher spending. Total committee spending of £650m. proposed for 2025. Total committee spending that totalled just £409m. in 2019, the year before you were elected. Yes, less than five years ago.
Painfully higher spending and painfully higher taxes on average workers will be the legacy of this States.
Finally, because it is easy and ‘understandable’ does not make it right. It does not make it fair, and it certainly isn’t equitable.
It is a crude, cruel, blunt approach, falling on average workers hardest. It shamefully does not share the burden.
Please, please for all these reasons, do not do this mad silly thing in this year’s budget. It is no way to run an economy. It is no way to create a fair society.
Dr Andy Sloan
Former States economist, former member of the States Fiscal Policy Panel