Property-Rich Cash-Poor
When political parties publish plans in their manifestos that they will impose a 10% property tax, they need to realize that a lot of people on St. Maarten are what is termed property-rich, but cash-flow poor. Even many apartment owners in St. Maarten seem to suffer from this description: property-rich but cash-poor. There may be many reasons for this. Poor financial planning, lack of any kind of budgeting or business planning, inadequate maintenance plans or lack of reservations for both expected and unexpected repairs are many of the factors that render a property owner property-rich, yet unable to generate any kind of positive cash flow needed to pay any kind of property tax, duties or fees that is not directly related to the maintenance, improvements or protection of these properties.
Then along comes a new party vying for the consideration of the voters and pitches a flat rate tax or the abolishment of income tax in order to sway the majority of voters who are disciplined tax payers and loyal contributors to the government coffers that they are no longer required to be burdened with the cumbersome duty of filing taxes because once this party is in government they will tax the property-rich people and the wealthy landowners and redistribute the income to the masses by doing away with income tax. The rich consumes more, so an indirect tax in the form of a sales tax or value added tax will generate more revenues from the rich who has more money to spend. Or so these parties would have you believe.
What these manifestos show is that their authors and by extension the parties do not really know their constituents here on St. Maarten because if they did they would know that taxing people’s property and taking away their property from them when they cannot pay the property tax owed due to the lack of monies to do so, will only incite violence and rioting in the streets because property and land is the last vestige of security that St. Maarten people have in order for them to survive and live comfortable with a roof over their heads.
Property values on St. Maarten are ridiculously high and extremely out of wack with the reality of income earners on the island interested in buying their own homes. Many senior citizens own property and their own homes. However, their reduced income or meager pension will be insufficient for them to afford to pay any kind of property tax. We live in a hurricane zone. So what happens if hurricane destroys your property? Are you then still obligated to pay property tax?
It seems these parties and their wealthy supporters are out to take away all the land from the St. Maarten people with their property tax proposal. With the implementation of a property tax, the rich will end up be buying up all the land and properties in St. Maarten at tax marshal’s auctions because of their ability to generate positive cash flow to afford to pay a property tax on their properties.
Property tax is a very insidious and sneaky tax. People need to understand that when parties tout tax reform as one of their party’s campaign platform topics, as tax reform happens to be one of the popular keywords in many manifestos leading up to the September elections, their property tax plans will lead to only one thing: people losing their properties. It needs to be communicated clearly to the voters: Property tax is a wicked tax. Property tax will put people in the poor house.
Letter to the Editor
