Vexed Bermoothes

In its disappointing 2010 budget, the Bermuda Government has raised payroll tax by 2%, to be shared equally by the employer and employee.

That means that the employee’s tax just went up by 21%.

The employer’s tax (they pay a larger amount than the employee) just went up by 9%.

The average income in Bermuda is $55,ooo … so the employee takes home $51,837.50 and the job costs the employer $60,637.50 before benefits are added in.

This hurts the individual taxpayer, and makes it less likely that new jobs will be added in Bermuda.  You can assume that additional mid-level professional jobs will be outsourced overseas.

Government has also raised the cap for payroll tax to $750,000.  This raises the spectre that additional upper-level professional jobs will also shift away from Bermuda – also eroding the support positions that go with them.

The budget has shown that Government will not restrain its deficit spending, and has no ideas on how to raise revenue other than hiking payroll tax.  That’s not encouraging, in a year when Government predicts that employment in Bermuda will fall to levels last seen in 2005.

A squeeze all round, well, except for Government which cackles along on its unabated spending spree.  Minister Burgess exhorts “Thank God for Paula Cox!”.  Indeed, she just ensured that the party train keeps on rolling.