How Could Senator Hill “Go to Bed Feeling Good?”

In today’s Source, I read that the “Senate Considers Tax Exemptions for Bank-like Companies.” This measure is being proposed as something that will bring both jobs and (tax) revenue to the Virgin Islands. The International Banking Entities (IBEs) involved would receive 100 percent exemption from corporate income tax, gross receipts taxes, property taxes, withholding taxes, and most excise taxes. In addition, owners/principals would be entitled to a exemption of between 90 & 95 percent their personal income tax.

In lieu of taxes, these IBEs would be required to hire a minimum of three employees an pay a fee of 1.5 percent for the first million of income and one percent for each additional million. And someone has the audacity to state that this would lead to tens of millions of revenue and 500-1000 jobs.

Well, I did the math. And at the rate expressed in the Source, by those testifying in support of this measure before the Senate, it would take 150-350 businesses between 30 & 70 years to reach that “tens of millions in revenue and 500-1000 jobs!” And, after 20 years of a similar measure in Puerto Rico, there are only 31 registered IBEs, so the chance of having the 150-350 needed to make this proposal worthwhile are quite slim, don’t you think?

But Senator Hill has the audacity to sell this to the people as a measure designed to be of benefit to the Virgin Islands and Virgin Islanders? How Could Senator Hill “go to bed feeling good?”

When more than 2000 people were left unemployed by HOVENSA’s closing; when countless teachers face pay cuts in a community where the cost of living is among the highest in the Nation; when the Superior Court can’t afford to pay salaries and when both the Departments of Labor and Education are laying off employees, how could Senator Hill say he would “go to bed feeling good” if one company came to St. Croix and hired a mere three people? Worse…how can we accept that rationale?

Allen Stanford

This proposal makes entirely NO sense! Seems to me, the only benefit is for the IBE principals and begs the question as to how above-board this whole arrangement is. Because these IBEs would not accept deposits, they would also be exempt from Federal Deposit Insurance Corporation (FDIC) regulation. And yes, removing FDIC regulation also (somewhat) protects Virgin Islanders from an Allen Stanford-type Ponzi scheme, but it also gives IBE principals free reign for what Banco Popular Senior Vice President of Operations for the Virgin Islands Region Oran Bowry fears could lead to money laundering. Is that really the economy we wish to create? Is that really how we hope to rebuild our Territory?

Yes, we may avoid the risk of investors losing money. But what about those who may be employed. When the gig is up and the money changers a tossed out of the Temple, what will become of the “500-1000″ employees? Does it make sense to set ourselves up for such a disaster?

Why do you think it’s possible for Senator Hill to “go to bed feeling good” in this scenario?

Share Your Thoughts!

Category : Economy, Politics and tagged , , , , , , , , .
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