Taxation Helps Rich Get Richer

Governments generates their revenue from taxation. There are two main category of tax, Corporate Tax and Individual tax. For Individual tax, it includes direct income tax and consumption tax. Income tax is calculated based on the amount earned during the year while consumption tax (e.g. Goods & Services Tax) is based on what you consume.

The Singapore GST originated on 1 April 1994, at 3%, but later increased to 4% on 1 Jan 2003 and 5% on 1 January 2004. it was raised again to 7% on 1 July 2007.

Looking at the timing of GST, during early 2003, Singapore was slowly and painfully climbing out of the economy scars of the terrorist act on 11 Sept 2001, where unemployment was high. On 1 Jan 2004, the country was just recovering from Sever Acute Respiratory Syndrome, SARS.

History evidenced that taxation was punishing the average. During election time, the government usually promises reducing tax or not increasing tax and many will be silly to be taken in. The rich on the other hand doesn’t really care as they does not suffer from the blunt of taxation. They could jolly well afford it anyway.

Reading from news, Nov. 14 (Bloomberg) -- Warren Buffett called on Congress to maintain the estate tax, saying that plans to repeal the levy would benefit a handful of the richest American families and widen U.S. income disparity. Buffett said that in the last 20 years, tax laws have allowed the ``super-rich'' to get richer.

I’ve brought up tax in my post not as a voice of disconsent towards the government but asking many, you work so hard to make that little money just to be taxed and be left with little. Why not look at ways to make your money work hard for you so that tax is no longer painful?

Remember, your savings in the bank depreciates by 3% (inflation) each year while it depreciates a further 7% when you spend it (GST). Why not find avenue to invest and grow this money into something double or triple of what you many loose, so that at the end of the day, you gain more than you lost?

Many choose to remain stubbornly 'ignorant' by refusing opportunities. The choice is yours. I've choosen mine. Each day we procrastinate, is our own lost.