gst: let's play with numbers

numbers are very interesting especially in percentage terms. let's apply it to the gst and see how funny it becomes. imagine a jobless man who happens to earn only $100 in a year as he was unemployed most of the time. his annual income is $100. and he pays no income tax. can't be? but what about indirect tax through gst? he pays in everyway as he consumes goods and services. bus fares, food, conservancy fees, etc. let's say all this adds up to $100 gst. he pays 100% tax!!! true. no joke. an unemployed can pay 100% or more in tax because of gst. what about those who earn no income and still pay gst? what kind of percentage? then apply the gst to those who earn a million and pay $10,000 in gst. in percentage terms, the rich pays very little gst compares to the very poor. this is number game.


Speedwing said...

If you earn only $100 a year, you will not have enough money to incur a $100 GST bill. Same if you do not earn anything at all, if you have no money to spend you cannot therefore pay GST.

redbean said...

some may live off the family or from some kind souls. and as long as the person takes a bus, eats, lives in a flat, he pays gst.

no escape.

bulikyre said...

If a person earns $100 a year and pays $100 in GST alone, thanks to loans and handouts, then...

Someone who earns $1 million a year may very well pay $1m in GST for the very same reason. He will also be subject to income taxes, so the total tax paid (as a percentage of base income) will still be higher than the $100 man.

Maybe you're trying to make the point that poor people should be exempt from consumption taxes, but I miss the message in your thought experiment.

Matilah_Singapura said...

Well done redbean, you have concretized what I've been saying for years:

Taxes, excises, imposts and other govt forced violation/intereference of property rights hurts THE POOR most of all

No one should be discriminated against by the colour of their skin, their religion, culture etc.

Therefore, by the same reasoning people should not be discriminated against by their net worth. i.e. there should be no discrimination of taxes between righ and poor.

Saying that "the rich should pay more because they can afford it" is bigotry at worse and ignorance at best.

All taxes should GO. The only moral way to tax is for the taxes to be voluntary. If that is not possible then taxes should be consentual i.e. if you subscribe to democracy, then the PEOPLE should be the ones to decide HOW they are to be taxed, for WHAT PURPOSE and by WHAT AMOUNT.

Anything else is tyranny.

redbean said...

hi bulikyre,

when i use the two extreme cases, it is just to make the argument more vivid. the rich will still pay much more than the poor in absolute terms. but many are so rich now, and with the singaporean mentality of saving, i bet the president will put all his new increment into his vault. so no extra expenditure or gst to talk about. but of course, for those who want to make their money works and invest in properties, sure they return some to the govt.

my key point, and how can you miss it, is discrimation in gst. whether this come in the forms of rebates, or excemption in some goods or people, is an administrative issue. but morally, and for social justice, those who are in the ruts should be spared from taxes. on this point a long, gst is immoral.

redbean said...

matilah, how can you keep contradicting yourself with impossibilities. no one will volunteer to be taxed. no one will consent to be taxed.

that is why in a free economy or capitalism, you need some moderating factors. and on the other extreme in communism, you need to moderate it as well. socialism tries to do a bit of moderation but went too far and too soft.

altruism on its own is dead. state tyranny is good if it is done for the good of the majority without being excessive and killing the capitalists. it is all a matter of how to massage the system for the common good. not for the good of selective individuals. that will be corruption.

and i don't agree that everyone shall pay taxes, especially people who can't even feed themselves. maybe extreme measures like termination of the weak will be more appropriate and kind.

i think there is still some good in being human to want to help the weak, after robbing them of everything and every opportunity. the irony of life.

Matilah_Singapura said...

Of course voluntary taxation works: look at the church and see how rich they are.

The Swiss cantons got together to form modern day Switzerland. This country is the closest to a voluntary tax system as we have got in modern times.

See how rich and peaceful they are...

redbean said...

matilah, i will agree with your swiss model. that is a very unique country with a very unique stew of people.

but as for the church, it is not free of coercion lah. the fear of god's wrath is more powerful than anything else. which god fearing soul will not give when god ask?

but that is the best business to do. i love to buy over the vatican.