Betraying the Diaspora, taxing the poor

Below, is an article on Martelly’s proposition to further tax the poor in
Haiti, through Diaspora remittances. Diaspora remittances are the ONLY
effective and sustainable aid that works in Haiti. A Haiti president ought to
protect, not diminish the value and use of Diaspora remittances.

Diaspora remittances not USAID “tied” aid, not the
NGOS, nor foreign benevolence sustains Haiti’s poor. Diaspora remittances are the most
effective and direct aid to the Haitian poor in Haiti. We supposed if Martelly
had proposed to tax the Haiti oligarchy or foreign NGOs, Mr. and Mrs.
Santa-Claus Clinton, would not be too happy. But tax the poor, through the
Diaspora – that untapped goldmine – well now, we’ll let, Socrate Simeon,
explain:

Martelly’s plan to tax money transfers is very bad for Hait

May 10, 2011 by Socrate Simeon, Haitian Perspectives
Martelly’s plan to tax money transfers to Haiti is the single most
destructive item on his agenda platform so far and sadly represents a
continuation of the status quo whereby the elite still refuses to play by the
rules .

On the surface, the surcharge looks pretty innocuous. After all, it’s the big
economic elephant in the room; an untapped goldmine that has been the most
stable element of Haiti’s fragile economic infrastructure. And with its
taxation being allocated toward the popular educational reform, it’s quite
understandable why most of us would quickly agree to the proposal without
giving it further consideration. But, if one looks deeper into the proposal, a
couple of things start to become clearer; it’s not the Diaspora that’s
going to feel the brunt of the tax, but rather the recipients of those money
transfers. It’s pretty much akin to raising taxes on a single hard working
mother with five kids, the children always end up feeling the brunt of the
effect more. Similarly, when a hard working member of the Diaspora sends money
to his family back in Haiti, that money helps those living in Haiti, and if
taxed, it is those people who will feel the brunt of the effect of the
surcharge, not the sender. Simply put, a $120 money transfer, if taxed $5 for
example, will turn into a $115 remittance, hence less money for the receiver.

Moreover, such surcharge will certainly have a negative multiplier effect on
the economy as consumption is likely to go down. The macro-economic indicators
in Haiti have always shown remittances from abroad to play an integral role in
the economic infrastructure of the country and have also created a spill over
economic effect that has permeated every aspect of the country’s economy and
daily life. When the financial crisis buffeted Haiti in the mid nineties, it
was partly due to this money from abroad that Haiti didn”€™t suffer a full
economic collapse.

Haiti continues to be beset by the same problems that have plagued it since
its inception; those who possess the bulk of the resources refuse to abdicate some
of the wealth in favor of their brethren. While it may be a universally
practiced sin, one would think that a post earthquake Haiti would foster a
different set of attitudes, albeit a patriotic one toward a country that has
provided so many blessings to this small faction. By pushing Martelly to twist
the arms of the Diaspora under the banner of Educational Reform in search of
additional revenues, they have shown quite ostensibly that no amount of
devastation will ever suffice to make them adopt a more Haiti-friendly
posture, both geo-politically and economically.

The sad truth is, it is the practice of capital flight, poor economic
infrastructure, rampant corruption, and also political instability that have
impeded economic progress in Haiti. As mentioned above, the rich in Haiti have
greatly benefited from capital flight by funneling hundreds of millions of
dollars worth of capital out of the country while reaping a hefty profit from
the ensuing devaluation of the Haitian dollar as a result of their actions.
These were the same people who pushed for de-regulation, privatization, and
monetary policies during the Aristide presidency that have exacerbated
Haiti’s economic woes even more. And now, with the poor in Haiti no longer
being able to quench their thirst for easy capital, the elite have now set
their sights on the Diaspora in a last ditch effort to abstain from having to
abdicate some of their wealth toward the recovery of a country that they had
never considered to be their own to begin with.

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