Economist John Jackson has voiced support for the proposal by the Jamaica Labour Party (JLP) to remove personal income tax from individuals earning up to $1.5 million annually, while rubbishing criticisms that the tax plan will “mash up the budget and the IMF agreement”.

Jackson voiced his opinion in an address to a service club this week in which he issued a no-hold-barred chastisment of financial analyst Ralston Hyman and the Government for what he termed “lies” being fed to the public that the tax plan will cost up to $32 billion.

In the lead-up to today’s general election, the proposal by JLP Leader Andrew Holness that 118,000 Jamaicans earning below $1.5 million per year be exempted from income tax has sparked major controversy.

The proposal, which is part of Holness’s 10-point plan to sell the JLP to the electorate, has been described by Finance Minister Dr Peter Phillips as “unworkable”, and that it risks derailing the economic reform programme guided by the International Monetary Fund (IMF).

The plan also proposes that people earning above $1.5 million and less than $5 million continue being subjected to the 25 per cent tax on income in excess of the current $592,800 threshold. Also, the is a proposal that anyone earning income in excess of $5 million per year will be taxed at the rate of 25 per cent of their entire income.

In his address to the service club, Jackson said: “One of the hottest topics today… is the $1.5 million tax plan. So we have this $1.5 million agreement going on, and I gather your guest speaker last week said it will mash up the budget and mash up the IMF agreement. Rubbish! Absolute rubbish!”

“What are the facts, gentlemen? I did my calculations. The JLP says 118,000 people are earning between $600,000 and $1.5 million. Nobody has so far contradicted it, so that seems a fair number. The difference between $600,000 and $1.5 million is $900,000; multiply that 25 per cent and that’s $225,000 per year. $225,000 multiplied by 118,000 is $26.55 billion,” he continued.

“So why we keep on repeating the lie that it is $32 billion, why? It’s not $32 billion and it’s not $30 billion, it’s not $29 billion. At maximum it’s $26.55 billion, but not everybody is being paid $1.5 million,” he said.

According to Jackson, rough calculations would bring the salary for 118,000 individuals to $13.55 billion. He noted that the JLP has, however, made reference to the paybill averaging $16 billion, but questioned whether the budgeted $16 billion would derail the IMF-approved economic reform programme.

“So $16 billion is going to mash up the budget and mash up the IMF? You think the IMF are idiots?” he reasoned. “The IMF is a bank just like Bank of Nova Scotia, all they want to do is get their money back and ensure that the creditors get paid.

“So why you think the IMF changed the fiscal surplus? You think it’s because they love Jamaica?” he asked.

Jackson referenced data released by the Economic Programme Oversight Committee on Tuesday, which noted that for the nine-month period up to December, the country had a surplus on tax revenue of $6.5 billion and interest cost on debt of $4.8 billion less than what was projected for IMF targets.

“That’s almost $12 billion in the nine months and you’re telling me that the minister must hug that up and do what he wants to do with it when he has taxed us to get to that level? Why don’t we want to return it to the people?” he argued.

“Answer me this, to whom does the tax dollars belong? Is it Peter Phillips, Audley Shaw, Portia Simpson Miller, or Andrew Holness? No, it’s your dollars, and my dollars. It is our money. We, as a people, have the right to decide our future. No politician has the right to do that, and it is time that we respect our individuals. Put the agreement to them, put the facts to them, and let them make the decision,” he said.

“I should not be sitting down and tomorrow a minister of finance or a prime minister decides he wants some taxes and he just gets up and decides to tax me whatever because he believes I have the money to be taxed. There should be parameters set that if you want to change those parameters they must recommend it, and we should agree to it, and if you want to change it again you come back to us and let us change it,” he continued.

“We cannot improve the system and get people to buy into it if we are going to bastardise, distort it, and tell lies to win our way to power,” he said. “Are we prepared to sell our souls by just lying ourselves to power?”