Recent changes in the tax code of Puerto Rico have caused me to rethink a long held opinion about the nature of our politicians. The Jenius, over at his blog, rightly predicts that the underground economy in Puerto Rico will perfect itself as taxation wriggles into all legitimate economic transactions. Small micro companies will just take what little business they have further underground away from the grabbing hands of government, and more of them will do it better.
Medium-sized brick and mortar shops will either shoulder the burden or pass the cost on to the customer. Either way with rising prices, already pinched consumers will be forced to buy from the lowest supplier, those 800 pound gorillas with their cheap global supply chains and volume discounts. If small business owners try to compete on price their already compromised position further erodes to the point of survival mode. They are then either pushed into gray areas of the underground economy or out of business entirely.
The big global players are already earning money hand over fist, and if their position is eroded only slightly by rising consumption taxes, they have a number of options. They can negotiate tax breaks for their local hiring, get government handouts to build new facilities, low interest loans, you name it. They have the clout and the cash to get what they want, whether it be cheap goods, cheaper labor, or cheap government.
So where does that leave us?
I always thought that bad government policies through incompetence or malice had an effect to drive out entrepreneurial spirit, to foment low level corruption, and give unfair advantage to large imported global players (pharmaceutical manufacturers, retailers, fast food, national chains etc). But now I’m notso sure it’s incompetence or even malice.
What if their aim is to kill off the last of the local companies for us, as a favor to pacify us and give us jobs, to give us what we want, to work for the man, and play on the weekends, to be kept, taken care of, and have no responsibilities? Maybe these politicians know something we don’t want to admit or care to face:
We want to be kept and taken care of.
We would rather work for Wal-mart than try to start our own business, and the best to which we can hope to rise, the pinnacle, the ultimate, is to be a general manager in someone else’s plant, to be validated by the higher power the foreign national, the colonial overlord.
I hope it’s just incompetence… although at this point I’d even take malice.
Please tell me I’m wrong, please Puerto Rico? Tell me it’s not what we want.