Letter of the Day | Can people manage another tax increase?

THE EDITOR, Madam:

The announcement from the Finance Ministry for the new financial year has once again placed taxation at the centre of national conversation. For people already navigating rising food prices, transportation costs, utility bills, and housing pressures, the question is if they realistically absorb another tax increase without further strains?

Taxation is a necessary instrument of governance. It funds public infrastructure, education, health care, security, and social protection. Governments must balance budgets, manage debt, and maintain investor confidence. Yet policy efficiency on paper does not always translate to sustainability at the household level. The critical issue is if the increase taxes are bearable within the present socio-economic climate. When wages are relatively sticky and inflation has eroded purchasing power, even marginal increases can have disproportionate effects.

An ordinary worker may ask: Where exactly will the additional tax revenue go? Will it result in measurable improvements in roads, schools, hospitals, and community safety? Will service delivery become more efficient, or will citizens pay more while experiencing the same bureaucratic delays and gaps? Trust and tax morale are closely linked; people are more willing to comply when they see visible, transparent returns on their contributions.

There is also the question of distribution. Who will carry the heaviest burden of any new tax measures? How will small business operators cope if operational costs rise again? If compliance costs increase, will entrepreneurship slow at the very moment the country needs innovation and job creation?

A higher tax burden can translate into reduced household spending, delayed home repairs, fewer extracurricular opportunities for children, and tighter grocery budgets. Families may cut back on preventive health care visits or educational investments. Commuters may feel the squeeze through higher fuel or fare costs. Each small adjustment compounds across millions of daily decisions, subtly reshaping national well-being.

Youth are particularly vulnerable in this environment. If taxation contributes to higher business costs, firms may slow hiring or reduce entry-level opportunities. Are we prepared for a scenario where more graduates compete for fewer jobs? Could increased financial pressure at home push more young people to defer tertiary education or drop out altogether? What happens to youth development programmes, sports initiatives, and creative industries if both public and private funding tighten simultaneously?

Young Jamaicans may also ask whether today’s tax increases are building tomorrow’s opportunities. Are we investing enough of this revenue into digital infrastructure, technical training, research, and modernised education systems? Will rural youth see improved access to technology and transport, or will disparities widen? Tax policy is not just about revenue extraction; it is about national direction. Each budget choice signals priorities and shapes generational outcomes.

When citizens feel overtaxed, compliance risks rise and informal economic activity can expand. That undermines the very revenue goals tax increases aim to achieve. Policymakers must therefore consider elasticity, enforcement capacity, and the psychological threshold at which taxpayers begin to disengage or resist.

None of this suggests that taxation should never increase. Rather, it underscores that timing, structure, communication, and accountability matter. People are not merely economic units; they are households balancing fragile budgets, young people planning uncertain futures, and workers trying to stay afloat amid global and regional volatility. A key question remains: alongside any tax increase, what concrete relief, efficiency gains, or growth measures will cushion the impact?

The conversation should move beyond whether taxes will rise to how the burden will be shared, how the proceeds will be used, and how success will be measured. People are justified in asking not only what more they must give, but what better they can expect in return.

LEROY FEARON JR.