Wednesday, February 21, 2007

GST Hike: We are Taxed for LIFE



After the budget was announced, I read the Chinese newspaper, Zaobao and I see what I expected: Front page flashed with reports on how good the budget is for the "poor".

The focal point is naturally of course on the amount of money poor people will get from the government OVER A PERIOD OF 5 YEARS. Nothing was mentioned about the "NEW POOR", neither was there a comparison made about pre-GST hike vs post-GST hike, how much each income group will be taxed or rather, how much more they will pay as taxes.

Instead, I have found an interesting post in Sammyboy forum on the net amount of taxes each income group will pay pre as well as post GST hike, accompanied by the reduced in income tax rate. No prize for guessing who will pay more after the increase in GST accompanied by the reduction in income tax. As long as your percentage of income are spent in local economy is HIGH, you will be affected more by the GST hike. On the other hand, as long as you did not reach the income bracket that allows you to enjoy the tax cut, you will not enjoy a bit on the benefits of income tax cut. The worst case is that you cannot enjoy the income tax cut but most of your income are spent in local economy, you will find that the amount of taxes you pay will increase tremendously in percentage terms. This normally happens to the middle class income earners and it means a bigger middle class squeeze.

While the really poor will get some sweets from the government and the rich and wealthy corporates enjoys income tax cuts, who will pay for the goodies given to the poor and the "savings" that is given to the rich and corporates? Someone will have to pay for this, surely! Of course, it will be the New Poor, middle class Singaporeans.

When I take a closer look at the so call "goodies" handled out by the government, it seems that they have tried very hard to make it look "impressive". $1000 over 5 years means only $200 per year. And most of these goodies go into CPF.

Now the problem is this, if the money is put into CPF, it is difficult for you to enjoy real benefits in terms on the freedom of usage of these monies. Furthermore, nobody really knows (hey, even PAP ministers don't even know or plan for GST hikes, how could we know? ;)) whether there will be more GST hikes in future or not. The longer the money is kept in CPF, the more likelihood that it will face higher GST in future when you take it out to spend them. This means that the purchasing power of the $100 given to you now may not worth $100 in future if GST continues to hike in future! Even when you are old and retired from working life, you cannot escape the claws of GST until the day you die! You thought that you could forget about paying income tax to the government when you are unemployed or retired? Nope, that will not be the case. Even when you are dead, your family will have to pay GST for your coffin as well as your funeral!

The sad fact is that once you are born in Singapore and remains in Singapore, from the very first day of your birth, you are taxed until you die, through GST. When your parents buys diapers for you, they will be taxed. When they buy milk powder for you, they are taxed. So, how do that add up to the little goodies that the government are giving to you for ONLY THE NEXT FIVE YEARS while you will have to continue to pay the 7% GST for the rest of your life?

This is what policy packaging is all about. In order to divert the attention of the true bitterness of the GST hike, they will try to make stories out of the goodies they are giving out now and hope that you will forget the blunt truth that you will be taxed a higher GST for the rest of your life. Let's concentrate on what you are going to get in the short term first, never mind the long term pain that you will be facing in future.

If Singaporeans cannot see through such smoke screen of goodies to get the single most important message that GST is about Life Long taxation regardless of whether you are alive, dead, rich or poor, then the middle class will face a bigger squeeze ultimately.

Goh Meng Seng

26 comments:

Anonymous said...

insightful post. Bravo. This should be in mainstream media in all languages. Immediately I understood your message!

Anonymous said...

yea i totally agree. I do think alot of people know how this budget is actually increasing taxes and making their financial problems worst, but we are all helpless.

Anonymous said...

The budget allocated to "welfare" is peanuts compared to say, military spending, but the coverage it gets in the papers is way out of proportion. That is an indirect misrepresentation, deliberate or not, of the actual scheme of things.

And that puts me off.

Anonymous said...

another idiot making use of the GST for self political gains

Kelvin Lim said...

It is indeed true that a GST hike is permanent and here to stay for life, regardless of the slew of "benefits" and "perks" dished out...

But I guess what peeves me is when the local papers compare this 7% with other countries and conclude prematurely and really naively that Singaporeans are privileged.

*shrugs*

Anonymous said...

Haven't you read Benjamin Franklin's famous quote, "in this world nothing can be said to be certain, except death and taxes"?

Anonymous said...

oohhh? Benjamin Franklin... ah a famous AMERICAN in HISTORY. And your point to connect to S'pore is...??

Since you are at it. Like to quote other famous Americans on freedom, justice and democracy.

Anonymous said...

I observe that your comprehension skills are really substandard (to describe the very least)

Maybe you should consider visiting sites/blogs that are pictorial-based, especially ones which contain less words.

It's pretty appalling that such a simple quote can throw you off-tangent.

Heh.

The Human Battery said...

> If Singaporeans cannot see through such smoke screen...

Sometimes (and I would argue, most of the time, in Singapore's case), people need to be reminded that injustice can happen to them, as opposed to other people, in order for them to wake up.

So, how about helping to highlight, on your blog and/or in various forums u visit, the insider's info of how the police treated ordinary citizens? :)

Goh Meng Seng said...

Dear Human Battery,

Yes, thank you for your reminder, I will be writing on the this issue of Organ Transplant Act very soon.

My friend who isn't that "political" at normal time called me lately to vent his anger unhappiness over this issue. He is pissed not because he is against Organ Transplant Act but because of the way the State acts.

I will surely have a link to your blog article on this episode when my article is done. ;)

Goh Meng Seng

Anonymous said...

Hi fat ass, besides writing nonsense, what else have you achieved?

Anonymous said...

Haha, GMS, you are the greatest wayang of all time, even your wayang boss has sacked you!

Anonymous said...

Well, it's good to see these are the best the PAP employed anonymous posters can do. The same old statements like a bad recording playing over and over again.

Anonymous said...

Fortunately, down at ground level alot of Singaporeans are seeing thru' this so-called "goodies for the poor" budget.

$1000 over 5 yrs=$200 per yr=$16.67 per mth. Mostly to CPF!?!? Big bloody deal!!!

These PAP clowns are really really out of touch!!

Anonymous said...

Keep up the good work - I enjoy your articles. At least you took the trouble to express your opinions and analysis on matters that concern the general public. So far I have yet to come across one from the ruling party.

With regards to your next article on Organ Transplant Act, I am concerned with a few issues:

1. communication (by the gahmen) on the implication of the Act, the process of retrieval of organs to the public, the opt-out for Sg and PRs

2. the approach that the hospital and police (why must the police come into the picture in the first place?) took in the process of facilitating the organ transfer

3. the MSM's inaccurate reporting of the events - as highlighted in Human Battery's blog

I personally find the entire "organ-harvesting" episode disgusting. I certainly do not wish my parents to kneel in front of other people begging them not to take me apart.

Anonymous said...

Goh the idiot is simply repeatign Tan bin seng bk "tax tax tax".

What Goh is trying to do is "if ever I form the govt no taxing everyting free"

Simply another attempt by Goh to seduce voters with a welfare state. No wk stay at hme fed by state.

We hv seen welfare states failing worldwide yet Goh wana repeat it here

Anonymous said...

Wonder whta would Mr Goh if given a similar set of problems to handle.

Anonymous said...

You want to know what he'll do? Well, vote him and whatever party he forms or is affiliated to in the next election. As you guys always tell him not to talk only. Well, vote them in!

Anonymous said...

Vote for GMS ??? Will you allow a houseman fresh from medical school to operate on you?

GMS din even belong to any political party as even the opposition has ostracized him, what a disgrace he is!!!

Anonymous said...

Well, in the past and presently PAP always have a lot of novices as MPs too?!? So what now?

Anonymous said...

Only the creme la crop can qualify to be a PAP MP; as for the scums, well, you can see who they are in the Wayang Party!

Anonymous said...

err....anybody knows where the wayang party will be partying this weekend?

Anonymous said...

Where else besides Glenda's pub?
All those wayang lechers....heehee

insurgents said...

hahah it seems like the anti-insurgents are putting the tax payers to gd use: by demeaning the opposition blogs and forums.

Gd job Mr Goh. i am 19 yrs old now. but the WP will have my vote in 4 yrs time.

"anti-insurgents" try harder plz. ur childish antics are self-defeating.
75.2% to 66.66% and they still call it a mandate LMAO
see the next election. i will dedicate my time to fight this anti-insurgents from the PAP.
PAP will fall in the next GE (:

Anonymous said...

mr lee says our women will become maids in other countries....not a bad idea the wages would be better!

When I die I want to come back as a Singaporean government minister.

Anonymous said...

just wondering which country doesnt have taxes? i guess this issue is a taboo... who likes pay for something that seems to have no returns?
perhaps we should revert back to stone age and do barter trading. And everyone should be an individual entity, not represented by anyone.Nobody likes to be controlled or adhere to decisons they dont like so would life be better?but then again herd instinct is inherent in all of us so thats impossible

dont slaughter me for flawed logic or u just dont get my point... these are just a 16yr old's 2cents worth of thought