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19-08-2015, 11:50 PM
An honorable member of the Coffee Shop Has Just Posted the Following:
https://2econdsight.wordpress.com/20...-gini-numbers/ (https://2econdsight.wordpress.com/2015/08/19/tharman-the-genie-his-make-believe-gini-numbers/)
Low Tax Mirage
In the comparison of Singapore’s low tax burden to Denmark and Finland high tax burdens, this is what Mr. Tharman did not say
●Danish and Finnish high tax burdens were mostly the result of taxes going into social security systems.
●Singaporean’s low tax burden in comparison is due to cashflows going into social security (CPF) taken place outside of tax.
●Danish and Finnish high taxes went on to provide a comprehensive set of social entitlements such as state pension, free or nearly free healthcare, old age subsidies for utilities, childcare subsidies, survivor benefit, disability benefit, free schooling, out of work benefits.
●Singapore CPF contributions provided only a basic retirement allowance and medical coverage which still require large out of pocket expenses.
Therefore to compare the cost and benefit of Denmark and Finland to Singapore, the flow of monies out of households to the government must take into account not only taxes but non-tax payments. That is to
say total financial transfer must be the basis for comparison, not just taxes. In Singapore’s case, this must include CPF contributions and out of pocket medical expenses. This is the cost side.
On the benefit side, the ability to bequeath upon death can be seen as an “advantage” to Singapore. However this “advantage” has to take two things into considerations. One is the large out of pocket medical expenses which reduces the “advantage” of the bequests. Next is the narrow range of benefit extraction from CPF compared to the comprehensive range of social entitlements given to Danish and Finns. It is then a matter of comparing bequests to comprehensive entitlements but do remember bequests have no value to Singaporeans during their lifetimes.
Taking all of the above into consideration, Singapore’s tax burdens may be a lot lower than Denmark and Finland but in terms of total transfers from household to government, Singapore pays as much or even more than Danish and Finns once CPF contributions and out of pocket medical expenses are factored.
Yet each Singaporean in his/her own lifetime receives far less benefit extraction than the Danes and the Finns.
Conclusion
Denmark and Finland achieved low income inequality with heavy tax burdens. But Mr Tharman’s smoke and mirror is that while Singapore’s tax burdens may be much lower, total financial transfers to the government is equal and higher than Denmark and Finland and yet income inequality remained much higher. That is to say despite high financial transfers to government, Singaporeans received very little in return. Do not get fooled by Mr. Tharman’s low tax fairy tale.
Chris Kuan
https://2econdsight.wordpress.com/20...-gini-numbers/ (https://2econdsight.wordpress.com/2015/08/19/tharman-the-genie-his-make-believe-gini-numbers/)
Click here to view the whole thread at www.sammyboy.com (http://www.sammyboy.com/showthread.php?213293-Tharman-The-Genie-amp-His-(Magical)-GINI-Numbers&goto=newpost).
https://2econdsight.wordpress.com/20...-gini-numbers/ (https://2econdsight.wordpress.com/2015/08/19/tharman-the-genie-his-make-believe-gini-numbers/)
Low Tax Mirage
In the comparison of Singapore’s low tax burden to Denmark and Finland high tax burdens, this is what Mr. Tharman did not say
●Danish and Finnish high tax burdens were mostly the result of taxes going into social security systems.
●Singaporean’s low tax burden in comparison is due to cashflows going into social security (CPF) taken place outside of tax.
●Danish and Finnish high taxes went on to provide a comprehensive set of social entitlements such as state pension, free or nearly free healthcare, old age subsidies for utilities, childcare subsidies, survivor benefit, disability benefit, free schooling, out of work benefits.
●Singapore CPF contributions provided only a basic retirement allowance and medical coverage which still require large out of pocket expenses.
Therefore to compare the cost and benefit of Denmark and Finland to Singapore, the flow of monies out of households to the government must take into account not only taxes but non-tax payments. That is to
say total financial transfer must be the basis for comparison, not just taxes. In Singapore’s case, this must include CPF contributions and out of pocket medical expenses. This is the cost side.
On the benefit side, the ability to bequeath upon death can be seen as an “advantage” to Singapore. However this “advantage” has to take two things into considerations. One is the large out of pocket medical expenses which reduces the “advantage” of the bequests. Next is the narrow range of benefit extraction from CPF compared to the comprehensive range of social entitlements given to Danish and Finns. It is then a matter of comparing bequests to comprehensive entitlements but do remember bequests have no value to Singaporeans during their lifetimes.
Taking all of the above into consideration, Singapore’s tax burdens may be a lot lower than Denmark and Finland but in terms of total transfers from household to government, Singapore pays as much or even more than Danish and Finns once CPF contributions and out of pocket medical expenses are factored.
Yet each Singaporean in his/her own lifetime receives far less benefit extraction than the Danes and the Finns.
Conclusion
Denmark and Finland achieved low income inequality with heavy tax burdens. But Mr Tharman’s smoke and mirror is that while Singapore’s tax burdens may be much lower, total financial transfers to the government is equal and higher than Denmark and Finland and yet income inequality remained much higher. That is to say despite high financial transfers to government, Singaporeans received very little in return. Do not get fooled by Mr. Tharman’s low tax fairy tale.
Chris Kuan
https://2econdsight.wordpress.com/20...-gini-numbers/ (https://2econdsight.wordpress.com/2015/08/19/tharman-the-genie-his-make-believe-gini-numbers/)
Click here to view the whole thread at www.sammyboy.com (http://www.sammyboy.com/showthread.php?213293-Tharman-The-Genie-amp-His-(Magical)-GINI-Numbers&goto=newpost).