Much Ado about Taxing
As expected, the GST will be raised to 7 percent on the 1st of July. That was never in doubt ever since Mr Lee Hsien Loong made the announcement during one of the parliamentary sessions. The interesting thing is the premise that this increase in GST is to help the poor, something which defies logic by virtue of common economic theory.
After the announcement, i must commend the Mainstream Media for a job well done, namely beginning a massive counter insurgency campaign to portray the Budget 2007 as mana sent for heaven. In fact the amount of positivity that is coming out of the straits times and today is enough to induce feelings of nausea in my self, being the self confessed cynic that i am. It appears that the Budget 2007 is the antidote or...medicine as someone calls it...to all the problems faced by us...heh, what a load of bullocks.
To be fair, its too early to see the effect of this GST increase as of yet and harder still to predict since most economic theories are predicated on the fact that all other stuff remain constants, or ceteris paribus. However there are several things which i feel deserve consideration, namely;
1) Even if this increase is offset by the goodies from the budget, are the poor necessarily better of than before? we must remember that they have been paying GST since it was implemented. Molly meek www.mollymeek.livejournal.com gives a good account of it...
2) IF the GST causes the cost of living to rise, wont this in effect nullify the effect of giving more help to the poor as the value of cash decreases?
3) With regards to workfare, its a scheme predicated on the fact that the person can find a job...what if he cant find a job and is forced to collect cardboard boxes? he obviously wont be eligible..
4) Increase in employer's CPF contribution seems good...but...wont that make a singaporean worker even MORE expensive to hire with respect to a FOREIGN TALENT? Ok...there is a levy on foreign talent i supposed, but if without the old CPF rate employers are still choosing foreign over local then this could exacerbate the situation instead...
Thus whatever the media says, we cannot take it at face value and must instead probe deeper. The consequences of not doing so could result in more heartaches in the future...
As expected, the GST will be raised to 7 percent on the 1st of July. That was never in doubt ever since Mr Lee Hsien Loong made the announcement during one of the parliamentary sessions. The interesting thing is the premise that this increase in GST is to help the poor, something which defies logic by virtue of common economic theory.
After the announcement, i must commend the Mainstream Media for a job well done, namely beginning a massive counter insurgency campaign to portray the Budget 2007 as mana sent for heaven. In fact the amount of positivity that is coming out of the straits times and today is enough to induce feelings of nausea in my self, being the self confessed cynic that i am. It appears that the Budget 2007 is the antidote or...medicine as someone calls it...to all the problems faced by us...heh, what a load of bullocks.
To be fair, its too early to see the effect of this GST increase as of yet and harder still to predict since most economic theories are predicated on the fact that all other stuff remain constants, or ceteris paribus. However there are several things which i feel deserve consideration, namely;
1) Even if this increase is offset by the goodies from the budget, are the poor necessarily better of than before? we must remember that they have been paying GST since it was implemented. Molly meek www.mollymeek.livejournal.com gives a good account of it...
2) IF the GST causes the cost of living to rise, wont this in effect nullify the effect of giving more help to the poor as the value of cash decreases?
3) With regards to workfare, its a scheme predicated on the fact that the person can find a job...what if he cant find a job and is forced to collect cardboard boxes? he obviously wont be eligible..
4) Increase in employer's CPF contribution seems good...but...wont that make a singaporean worker even MORE expensive to hire with respect to a FOREIGN TALENT? Ok...there is a levy on foreign talent i supposed, but if without the old CPF rate employers are still choosing foreign over local then this could exacerbate the situation instead...
Thus whatever the media says, we cannot take it at face value and must instead probe deeper. The consequences of not doing so could result in more heartaches in the future...
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