I just got back from an "orientation session" on how to report the upcoming Municipal (1.5%) sales tax. Here's My assessment:
We are screwed. Royally, savagely, painfully and needlessly screwed.
I was too easy on these shitbags. Here's why:
Two local economists, several economic theories and hundreds of economic sudies indicate that a consumption tax at the point of collection causes an "impact cost rise" of between 11 and 18%, on average. In the case of the Municipal tax, the collection point is the business place, including individuals. So how much does the "tax collector" get as a "benefit" for doing the government's needless dirty work?
Three percent. Three freaking percent.
Taking the low figure above (11%) means that, all of a sudden, product and service providers are losing 8% the moment the sales tax hits its stride (due November 15th.) So in a small business selling $20,000 a month, the Municipal sales tax bill is $300 and the business person gets to keep all of $9 for his/her work as a government lackey, while said lackey's expenses go up another $50 to $130 a month. Woo. And hoo.
What makes up this impact cost? Time and money in fulfilling the obligation; more records, more record-keeping, tax and procedural consulting; diversion of resources from production to processing... The list goes on.
Now add to this fact the tiny requirement that you have to file the Municipal tax report every month...or face a fine as high as $5,000.
Every month. Whether you have to file it or not, for in My case, as a service provider, I don't have or am authorized to collect a sales tax. But I have to file anyway! Guess what "profession" is exempt from this monthly filing crap? Lawyers. And I guess whores, too, but I repeat Myself.
What does this mean? I have a cost...but no "benefit." So like My government lackeys, who will raise their prices to cover "costs after benefits", I too will raise My rates, because I'll be damned if I'm going to subsidize someone else's tax bill. Not to mention I have to pay My 7% in sales tax as a consumer, too.
Does anyone not a Fool believe that prices will actually come down because of this?
And as if filing a monthly report that shows that you are losing money isn't enough, understand that the 5.5% General Sales Tax has the same requirement--monthly filing and fines for not complying--but without any percentage "benefit."
And how much is the 5.5% going to cost? From the example above, $20,000 in sales will mean $1,100 in monthly taxes, with an additional cost of about $1,100-$2,500. Take them both into account and you have a monthly burden of $1,400 in taxes with additional costs of as much as $2,600. Per month.
The average monthly salary in Puerto Rico is $1,054.
And The Fools filled the media with claims that the sales tax was implemented "to stimulate growth." That's like peeing in the soup and calling it "flavoring."
And what about the claim that the sales tax is meant to "reveal the underground economy"? Yeah, right. Local Puerto Ricans who receive food stamps (locally known as PAN) and those on the WIC program are exempt from paying sales tax on their food purchases within the respective program's parameters. So rather than help wean these individuals and familes off the dole, it reinforces staying in dependency because you are instantly 5.5% poorer when you leave Uncle Sam's largesse to make your way in "Our" Puerto Rico.
Yeah, the quotation marks are in the right place.
What burns Me are two things:
1) The utter, squalid and pathetically bovine indifference We have as a society to being led to slaughter by the craven hyenas We elected. The same ones who slap a sales tax on Our asses and try--and keep trying--to exempt themselves from it by finagling privileges to military stores and raising their salaries in automatic allotments.
2) That I didn't go ballistic about this earlier. I screwed up. I felt I had to try to keep the whole (or at least a good part) of My rhetoric (in the classic sense of the word; go look it up) on an intellectual level, one of reason and rational comparison and not one of emotional rampage. Screw that. There is no rational reason for a sales tax in a country so over-taxed, so mismanaged, so royally screwed by U.S. interests and local pandering to those interests that We are left without a real economy. What We have is a mutation, a farcical mélange of greed, hypocrisy, stupidity (Stupid Rosselló) and outright thievery that should be banned everywhere including Boston.
Here's what I'm going to do: As My profession is neither authorized nor required by law to collect a sales tax and yet by law I'm required to file a fucking report every month, I will file it showing zeros.
Every month: zero income, zero deductions, zero tax collected, zero owed.
If Hacienda comes after Me claiming I have to show My income, I will tell them My income is irrelevant to sales tax reporting--because it is. Since My only requirement is to file their paperwork and they can't force Me to reveal My income because I have no sales taxable income, they can go grease a flagpole and sit on it.
In fact, I will grease one for them. And for every Fool. We'll need to import flagpoles, but that's somebody else's sales tax problem.
And here's another point, screw what Hacienda thinks: Cash still rules and the sales tax will only strengthen the underground economy. And if I can help make it stronger, I will.
The Jenius Has Spoken.