Crazy Talk: Reuters thinks most Cubans have not paid taxes in 50 years

Pull me out of this spin machine! The media at Reuters posted a story early this morning – now highlighted on Drudge Report – that gives readers the impression Cubans have not paid taxes in 50 years all-the-while getting their free services.

Well sure, I guess you can say most Cubans did not write a check to Castro’s version of the IRS, or have withholding taken from their paychecks, but what’s the real story? Reuters starts off this way

Most Cubans have not paid taxes for half a century, but that will change under a new code starting January 1.

What spin. They don’t pay taxes because employers pay employees almost nothing and then they hand over almost all of what they earn directly to the government. Even when your’re not “paying” taxes in Cuba, you’re paying taxes in Cuba. Why hide or mis-represent this fact?

In the 1990s after the collapse of the Soviet Union, the country’s main benefactor, the Cuban government imposed a few scattered taxes, but mostly preferred to maintain low wages so it could fund free social services.

Oh really? If they did not collect taxes, how did they fund “free” social services?

Under the old system, large and small state-run companies, which accounted for more than 90 percent of economic activity, simply handed over all their revenues to the government, which then allocated resources to them.

The article does not give me the impression they are ditching the old system entirely. How many people are willing to bet all of the state-run companies are still handing over tons of revenue while at the same time implementing the new tax scheme while “increasing” wages?

7 replies
  1. JBS
    JBS says:

    It sounds as though the only place the Cuban government can get any new revenue is by taxing the spoils of the (evil) capitalists.?
    Like Willie Sutton said, “It’s where the money is.” Reminds me of another government, one that always wants to penalize achievement, one that lusts after the profits of businesses and hardworking people. Why, its . . . the US of A!
    Pogo was right.

  2. joe_m
    joe_m says:

    Kind of like China, the employer pays an employee tax, it is not withheld from the employees paycheck. I’m surprised this kind of slight of hand is not used here. Most don’t look at their withholdings, imagine what the states and feds could get away with by taxing the employers and only the net amount was paid to employees who would think there was no income tax.

    • Lynn
      Lynn says:

      That’s ok, none of the members of Congress read intelligent blogs. They get their info from Harvard “professors” or lawyers who sponge off their clients. They don’t listen to business leaders or people who actually understand economics.

  3. yeah
    yeah says:

    “they pretend to pay us, we pretend to work!”
    sounds productive, let’s try it here, right?? we’ve already got the “pretend to work” part down and they’re doing their best to make what we do bring home worth less and less and “pretend” to make it like our earnings are increasing!

  4. lizzieswish
    lizzieswish says:

    Having visited Cuba in June, 2012, on a people-to-people exchange, I was stunned to see how restrictive the Cuban government still is. ?I now understand why so many Cubans would float on rafts and risk their lives at sea to get to America! ?Read “Waiting for Snow in Havana” and you’ll understand what happened before Castro – and after. ?Obama supporters beware -be careful what you wish for!

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