The Editor, Sir:

The prime minister and the Government should be commended on the reintroduction of graduated income tax as a component of the revised tax package. At the same time, it is disappointing that Mr Golding declared the graduated tax "a temporary measure which will apply from January 1, 2010, to March 31, 2011".

Under the unregulated capitalist system, those who command capital have the power and the tendency to skew the economy in their favour, effectively disadvantaging the consuming public and their employees by charging the highest possible price and paying the lowest possible wage. Governments in that situation have a moral duty to effect more equitable and just distribution of the fruits of economic activity by taxation.

Graduated income tax, not as a temporary emergency measure but as a permanent systemic imperative, is a vital element of the tax regime of any capitalist state with a commitment to social justice.

Lost system

Interestingly, Jamaica lost its graduated income tax system in the same national budget in which free secondary and tertiary education was abolished and it has not been restored to this day.

If the prime minister is to be interpreted literally according to his spoken word, then we are heading for anomalies in his graduated-tax system. The prime minister said: "The personal income tax rate will be increased to 27.5 per cent on all income above the threshold for persons earning in excess of $5 million, and 35 per cent for persons earning in excess of $10 million. In other words, persons earning up to $5 million will continue to pay the existing rate of 25 per cent. Those earning more than $5 million will be charged an additional 2.5 per cent on their taxable income, and those earning more than $10 million an additional 10 per cent on their taxable income."

Less disposable income

According to my calculations, after tax, persons with taxable income between $5,000,001 and $5,172,413 would then have less disposable income than those earning $5,000,000. Similarly, those earning taxable income between $10,000,001 and $11,153,846 would have less disposable income than those earning $10,000,000.

Perhaps the Government should decide that persons earning taxable income between $5,000,001 and $10 million would pay their tax in two tiers, viz, $5 million at 25 per cent and the excess at 27.5 per cent; while those earning taxable income in excess of $10 million would pay in three tiers, viz, the first $5 million at 25 per cent, the second $5 million at 27.5 per cent (but why not 30 per cent?) and the portion above $10 million at 35 per cent.

Then there would be no anomaly.

I am, etc.,

LOUIS MARRIOTT