Perception Of Poverty, Poverty Of Perception

We were just being told that some people, "to our naked eyes, look like poor people" or people who earn "small salaries but they can still send their children abroad" at their own expenses. "This means they could have under-declared their income." But the GST system "is more progressive as it depends on how much our expenses are."

I think it is dangerous when the Government make statements like this - based not on proper analysis but on impressions. One may be clever at making statements on isolated issues. But isolated issues may be the outcome of an error in the whole system

To my naked mind, there is absolutely nothing wrong with the person who dressed down and live a simple life so that he can save his salaries for the education of his children abroad. There is even something to be admired about such a person because he does not rely on the government for scholarships for his children's education as he knows they will never get the scholarships based on their ethnicity. He knows that, for the future of his children, an overseas education may be worth the money as the local education may not be good enough for his children. Of all persons, a salaried man is likely to be the only salaried man who is honestly paying his taxes. There is just so much ignorance in such a short statement.

The GST should be held up as a major contender against income tax. The debate is whether you tax effort or you tax expenditure. In the old world where money (capital) was scarce, there was the view that profit made out of capital should be taxed, and that incomes from salaries should be taxed to pay for pensions and healthcare and education, and other public services.

Then along came Keynes who said that spending is good for the economy, the more you spend the better the economy. Keynes was right to suggest that government spending should be used to smooth out a temporary cyclical glitch. But expansionary fiscal policy are now wrongly used to cover up the problems of slow growth of an economy with structural errors. Instead of correcting structures, the government continues to spend and it is looking for all kinds of ways to tax in order to keep feeding a badly managed economy.

If the currently thinking is that spending is good for the economy, then this is the wrong time to implement the GST which taxes spending.

If you think that GST is the better revenue generator, then you must let off the consumers by removing totally the taxes on personal incomes. You can keep the taxes on profits.

Just to think that the government will berate the poor citizen who has to live the life of a simple person so that he can rise above the wrongs that his government and his country is doing to him and his family...