I got mail from the handsome Juan David Yrasquin

I have to sit down with him one day and find out what exactly happened to his road to leadership. He fits the bill, educated, connected, pedigreed, handsome, yet, no chocolate.

But anyway, I am always happy to hear from him. He wrote:  Sharing guest lecture where I scrutinize shift towards indirect taxation in Aruba.

I think the subject is very relevant, because the MinFin has been loudly lamenting the fact that the treasury is empty, from the pages of the newspapers, as the previous government left the coffers empty, having built too many trams and bridges.

We’re pretty broke, and financial situation is not pretty, so taxation will soon rear its ugly head and we will be forced to close the gap between budget and cash in hand. We might as well start talking about it.

In my book the illusive 50 million of the refinery rent never materialize, everyone went to jail, and left Aruba hanging. I hear Nilo Swaen is lending a helping hand, working the abacus.  Good.

JDY writes:
This past Monday I was invited to give a guest lecture on taxation in Aruba at the Erasmus School of Law in Rotterdam  – since you might be interested in this debate I made this summary for your perusal.
In the lecture I scrutinize the idea of shifting the tax burden towards indirect taxes and evaluate the move against the criteria of equity, administrability and economic efficiency. I also compare  1. the effective income tax levels of Aruba against the Netherlands, and  2. the share of direct to indirect taxation.
Here are some of the findings:
1. Aruba’s effective income taxes are lower than the Netherlands, even though we have a higher top marginal income tax rate.
2. Aruba does not tax capital gains or interest income (in the Netherlands called Box 3 income).
2. Aruba’s share of indirect taxation is higher than the Netherlands and as such there is a higher share of proportional taxes.
I finalize my lecture by calling on students to do research on tax reform in Aruba and contribute to the tax reform debate from the viewpoint of the public interest.
Warm regards,
Juan David Elias Yrausquin

You may view his slides in Dutch, I did, it’s all Chinese to me, but I realize it might be of interest to some readers. https://issuu.com/juanyrausquin/docs/gastcollege_erasmus_jdey_van_direct

When I confessed at being a financial flop JDY directed me to a book Taxing Ourselves, Fourth Edition, A Citizen’s Guide to the Debate over Taxes, available on line, https://mitpress.mit.edu/books/taxing-ourselves, which I intend to get as soon as I finish watching the five seasons of Ray Donovan. I have my priorities straight.

The MIT press says in the Overview: As Albert Einstein may or may not have said, “The hardest thing in the world to understand is the income tax.” Indeed, to follow the debate over tax reform, the interested citizen is forced to choose between misleading sound bites and academic treatises. Taxing Ourselves bridges the gap between the two by discussing the key issues clearly and without a political agenda: Should the federal income tax be replaced with a flat tax or sales tax? Should it be left in place and reformed? Can tax cuts stimulate the economy, or will higher deficits undermine any economic benefit? Authors and tax policy experts Joel Slemrod and Jon Bakija lay out in accessible language what is known and not known about how taxes affect the economy, offer guidelines for evaluating tax systems, and provide enough information to assess both the current income tax system and the leading proposals to reform or replace it (including the flat tax and the consumption tax).

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December 04, 2017
Rona Coster