In recent years, workers in Cuba have dropped out of the low-wage public sector and state-owned companies to get coveted jobs in the small private enterprises that have mushroomed throughout the island despite strict government controls.

Now, these workers will see the pay they take home reduced by as much as 20%, according to new income tax regulations published in the government’s Official Gazette on Tuesday.

But unlike in most countries where those higher tax rates are designed for the highest earners, in Cuba, where the state monthly salary is equivalent to $15, workers earning as little as $109 a month will be in that tax bracket.

According to the new decree, private sector employees will have to pay a 20% income tax on earnings above 30,000 Cuban pesos, about $109 per month. That’s a 15% tax rate increase from the previous scale set up in 2021, which imposed a 5% income tax for earnings over 9,510 Cuban pesos.

Business owners must automatically deduct the tax payments monthly, the decree says.

There are currently 9,652 small and medium private enterprises, according to government figures. Another 596,000 people are self-employed. Amid rampant inflation and a worsening economic recession, the Cuban government announced in late December and earlier this year a number of cuts in subsidies, price hikes on gas, transportation and electricity, and higher taxes on the emerging private sector in an effort to “stabilize” the economy, officials said.

So now the Cuban tax structure for these private enterprises looks like this:

The tax burden on Cuban private businesses now comprises a 35% tax on profits, a 10% tax on sales or services provided, a 5% payroll tax, a one percent revenue tax to support local governments and contributions to social security equal to 14% of workers’ salaries. Owners of the mipymes [state-permitted private enterprises]  also have to pay up to 20% taxes on dividends.

What's more, it's perfectly normal for this crap to happen in Cuba because it already has happened in Cuba, any time there is an "opening" in the economy. The government allows a few private enterprises to exist, then as soon as they start to make money, they swoop in and take all the money. It happened in the '60. It happened in the '90s. Now it's happening again.

It's like a farmer who sows crops, gets them to grow a little, then moves in with the harvester or combine to mow them all down before they've even produced something to harvest.

That's the Cuban government in action.

The bad part is that idiots here in this country think that Cuba is a model. a nation worthy of emulation. Nothing says 'no' to that bad idea like this outrageous tax hike. Castroite communists haven't a clue in the world what it takes to get economic growth. They bite when they should lick and lick when they should bite, as the Soviets used to say. 

For the rest of us, they're a cautionary tale into the economics of socialism and its continuous failures. Socialism fails every time you try it, and today's Castroites are showing us how it's done.

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