Mind... the (income) gap

(03-05-2013, 09:29 AM)sunrocker Wrote: I actually disagree with progressive tax IMO...

Why should the rich be tax more than the more? It's like a punishment to earn more isn't it? The rich work for it, it is not as if GOD gave it to them?

P.S. I'm not rich

I guess it is to help them contribute back to society which has aided them to achieve their current position. Most of the time it is easier for a person to make that contribution if it is mandatory rather than voluntary, even if he felt that it's correct in the 1st place. If the tax does not really affect their lifestyle, it wouldn't be considered punishment right?

(03-05-2013, 09:29 AM)sunrocker Wrote: I actually disagree with progressive tax IMO...

Why should the rich be tax more than the more? It's like a punishment to earn more isn't it? The rich work for it, it is not as if GOD gave it to them?

P.S. I'm not rich

Well, i will look from other perspective.

The rich ones get richer not from vacuum, but within a society. If we put the same rich ones into an isolated island, i bet they will not get richer no matter how smart and hard-working they are.

I will not dismiss their effort. They are rewarded handsomely. Since part of their success is due to society, contribute more tax is reasonable.

P.S. I'm not rich too, well... not among buddies in this forum

(03-05-2013, 09:59 AM)smallcaps Wrote:

(03-05-2013, 09:29 AM)sunrocker Wrote: I actually disagree with progressive tax IMO...

Why should the rich be tax more than the more? It's like a punishment to earn more isn't it? The rich work for it, it is not as if GOD gave it to them?

P.S. I'm not rich

I guess it is to help them contribute back to society which has aided them to achieve their current position. Most of the time it is easier for a person to make that contribution if it is mandatory rather than voluntary, even if he felt that it's correct in the 1st place. If the tax does not really affect their lifestyle, it wouldn't be considered punishment right?

Aided them to achieve their current position? How did the society aided them?

Maybe the word 'punishment' is too wrong but you get what I mean ya? For every dollar, why is the rich tax at 20% while the poor is tax at a lower rate etc.. And yes it might not affect their lifestyle but taxes that doesn't affect the rich doesn't mean the rich should are happy to pay it? And if the rich thinks it good/ok to pay higher taxes, there won't be a thing call 'creative accounting'.

P.S. I think I should clearer upfront. Although I'm not rich, but my father-in-law is to a certain level. The taxes he pay is more than my annual income. And some of the staffs doesn't even pay taxes but I can see my FIL putting more effort into his work/business than the staffs. Which is why I disagree with progressive tax.

Let this be a healthy debate ok?

(03-05-2013, 10:19 AM)sunrocker Wrote: Aided them to achieve their current position? How did the society aided them?

Maybe the word 'punishment' is too wrong but you get what I mean ya? For every dollar, why is the rich tax at 20% while the poor is tax at a lower rate etc.. And yes it might not affect their lifestyle but taxes that doesn't affect the rich doesn't mean the rich should are happy to pay it? And if the rich thinks it good/ok to pay higher taxes, there won't be a thing call 'creative accounting'.

P.S. I think I should clearer upfront. Although I'm not rich, but my father-in-law is to a certain level. The taxes he pay is more than my annual income. And some of the staffs doesn't even pay taxes but I can see my FIL putting more effort into his work/business than the staffs. Which is why I disagree with progressive tax.

Let this be a healthy debate ok?

First of all, instead of concerning the 20% taxes paid, we should also aware the 80% gains (ex-expense).

Next, shall we view the 80% gain SOLELY due to your in-law effort? Not really, he benefited from government infrastructures, public policies, supply of labor to help him to earn, etc. Those are from society he is living with

(03-05-2013, 11:27 AM)CityFarmer Wrote:

(03-05-2013, 10:19 AM)sunrocker Wrote: Aided them to achieve their current position? How did the society aided them?

Maybe the word 'punishment' is too wrong but you get what I mean ya? For every dollar, why is the rich tax at 20% while the poor is tax at a lower rate etc.. And yes it might not affect their lifestyle but taxes that doesn't affect the rich doesn't mean the rich should are happy to pay it? And if the rich thinks it good/ok to pay higher taxes, there won't be a thing call 'creative accounting'.

P.S. I think I should clearer upfront. Although I'm not rich, but my father-in-law is to a certain level. The taxes he pay is more than my annual income. And some of the staffs doesn't even pay taxes but I can see my FIL putting more effort into his work/business than the staffs. Which is why I disagree with progressive tax.

Let this be a healthy debate ok?

First of all, instead of concerning the 20% taxes paid, we should also aware the 80% gains (ex-expense).

Next, shall we view the 80% gain SOLELY due to your in-law effort? Not really, he benefited from government infrastructures, public policies, supply of labor to help him to earn, etc. Those are from society he is living with

Friends, teachers, workers, colleagues, internet, tv shows, people who construct your house, etc. Such things loh. Or else how to survive in life? Everyone complain about tax correct? Doing something that you feel is right doesn't mean you need to be happy about it...

(03-05-2013, 11:27 AM)CityFarmer Wrote:

(03-05-2013, 10:19 AM)sunrocker Wrote: Aided them to achieve their current position? How did the society aided them?

Maybe the word 'punishment' is too wrong but you get what I mean ya? For every dollar, why is the rich tax at 20% while the poor is tax at a lower rate etc.. And yes it might not affect their lifestyle but taxes that doesn't affect the rich doesn't mean the rich should are happy to pay it? And if the rich thinks it good/ok to pay higher taxes, there won't be a thing call 'creative accounting'.

P.S. I think I should clearer upfront. Although I'm not rich, but my father-in-law is to a certain level. The taxes he pay is more than my annual income. And some of the staffs doesn't even pay taxes but I can see my FIL putting more effort into his work/business than the staffs. Which is why I disagree with progressive tax.

Let this be a healthy debate ok?

First of all, instead of concerning the 20% taxes paid, we should also aware the 80% gains (ex-expense).

Next, shall we view the 80% gain SOLELY due to your in-law effort? Not really, he benefited from government infrastructures, public policies, supply of labor to help him to earn, etc. Those are from society he is living with

i can't agree more. Just remember one word, "Capitalist". It seems Capitalists rule the world of business. In fact the best & most successful Capitalists choose businesses that can be run by hired people without their presence. How about KFC, Big Mac, our local Breadtalk...etc.
Pure Capitalists even do better. They are what we called "Venture Capitalists" who are a special breed with money to venture. And how they have become so rich in the first place.
So definitely the more successful richs should give back some to society.
In fact, all of us "passive businessman" is kind of "Venture capitalist".
So i think if we are successful, we should contribute a "little" back to society too.
Nobody can get rich in a "vacuum".

(03-05-2013, 07:37 AM)HitandRun Wrote: Specuvestor

Thanks for the reply.

I have to re-read the thread to remember what the debate is about.

Conceptually, I agree with you. I have no problem with progressive taxes. Aren't taxes already progressive at the moment? I have no problems with taxes being even more progressive.

However, I have a big problem with folks thinking that the policies will only tax the "rich", the "rich" being defined as someone else. In order for the tax policy to be meaningful, the tax base must be sufficiently big. By definition, all folks earning more than the median income could be the target of the tax policy. Does everybody realise that? I know the brain dead editor of ST does not. He was referring to someone else too. At the end of the day, I was hoping to answer 2 questions, a. What is the tax base you are targeting at? and b. How much do you wish to raise from the exercise?

As explained, a more equitable tax structure should be that you are taxed on your higher end spendings more so that your BLENDED or EFFECTIVE tax rate should be similar to the guy at the bottom.

Hence don't just focus on the INCOME tax alone. Focus on what is the effective tax rate that the general populace pays. The rich pays little because they usually save much more so their effective tax rate is not equitable to the rest. That is why some jurisdiction taxes capital gains and interest to impose a tax on savings to balance the playing field.

As I mentioned, Buffett's logic is VERY SIMPLE: Doesn't make sense that he pays lower tax than his cleaning lady. It's as simple as that. It is the implementation that is complicated

(03-05-2013, 08:31 AM)Temperament Wrote: To me GST is a terrible tax for the poors, and below average earners, retirees, all non-working living beings. Even a growing foetus are not spared the GOH SAYS TAX.

That is why the rebates are given back to the lower earners to REDUCE their effective tax rate. If done properly it adheres to the principles that I am aluding to in this thread.

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(03-05-2013, 10:19 AM)sunrocker Wrote:

(03-05-2013, 09:59 AM)smallcaps Wrote:

(03-05-2013, 09:29 AM)sunrocker Wrote: I actually disagree with progressive tax IMO...

Why should the rich be tax more than the more? It's like a punishment to earn more isn't it? The rich work for it, it is not as if GOD gave it to them?

P.S. I'm not rich

I guess it is to help them contribute back to society which has aided them to achieve their current position. Most of the time it is easier for a person to make that contribution if it is mandatory rather than voluntary, even if he felt that it's correct in the 1st place. If the tax does not really affect their lifestyle, it wouldn't be considered punishment right?

Aided them to achieve their current position? How did the society aided them?

Maybe the word 'punishment' is too wrong but you get what I mean ya? For every dollar, why is the rich tax at 20% while the poor is tax at a lower rate etc.. And yes it might not affect their lifestyle but taxes that doesn't affect the rich doesn't mean the rich should are happy to pay it? And if the rich thinks it good/ok to pay higher taxes, there won't be a thing call 'creative accounting'.

P.S. I think I should clearer upfront. Although I'm not rich, but my father-in-law is to a certain level. The taxes he pay is more than my annual income. And some of the staffs doesn't even pay taxes but I can see my FIL putting more effort into his work/business than the staffs. Which is why I disagree with progressive tax.

Let this be a healthy debate ok?

There is a good speech by Michael Lewis on this. People overestimate their worth. We see it in the bankers and CEOs.
www.youtube.com/watch?v=CiQ_T5C3hIM

Bill Clinton say as much that Republicans overestimates the individuals. This is inline with what the other forumers are saying. Your success is not yours alone, though of course you must have put in your ounce of hard work. Just think about your opportunity set in Singapore vs if you are born in say Bangladesh. The environment already gives u an edge without doing anything.

That's essentially what Buffett is saying when he says he's lucky to be born in US. Otherwise his skill may not be useful at all. And talking about fairness he would ask the Republicans to debate the tax issue on beach of Omaha.

Same thing what Michael Moore is saying in Farenheit 911. Talking about fairness why should the poor form the bulk of the US Army?

End of day we have to think about what is EQUITABLE rather than just look at fairness in an enclosed set instead of looking at bigger picture. And remember there are also those who INHERITED wealth, not just those who worked for it. That's why I support estate tax. Like Buffett says we need to level the playing field. And tax is JUST one way.

Buffett's rather chatty speeches contains a lot of wisdom, yet simple ideas.

Specuvestor

Are you saying let's have a flat tax on income and wealth (including property tax, income tax, capital gains tax, estate duty, gst, etc.), say 5%?

I am saying the EFFECTIVE tax rate on a person's net worth should be roughly similar and equitable Simple way is of course to have a flat rate across the spectrum and minimise tax breaks... but the actual execution will be difficult, together with policy bent. Estate tax for eg is not even supposed to be fair per se, but to level the playing field for the younger generations for longer term self-enlightened social goals.

Quote:"EFFECTIVE tax rate on a person's net worth should be roughly similar and equitable"
"Estate tax for eg is not even supposed to be fair per se, but to level the playing field for the younger generations for longer term self-enlightened social goals. "

Sorry, can i say,
"If i understand the above correctly Singapore shouldn't have the "Lee Dynasty GOV" or the "PAPY Dynasty Gov" in the 1st place. Right?"