CPF

[Burry83]

We are effectively paying a minimum tax of 36% on top of our income tax... but our social benefits pale in comparison to other countries with similar level of taxes.

It's also funny that contribution is capped at 5,000. So the people below averaged are effectively "taxed" more than the one above the average income bracket... So much for income redistribution.

Going by the logic of self sufficiency, CPF contribution should not have a cap. Living expectations varies pretty much according to income level... so 1.2k/mth may be sufficient to a typical singaporean worker. Same may not be sufficient to someone who have been earning 10k/mth or in the case of our leaders, 8k/day

A fallacious argument.

You have it the other way around. A tax is money taken from you to fund government expenditure, which may or may not benefit you. CPF is your own money, albeit released to you in carefully staggered intervals.

CPF contributions are exempt from tax. So the $5000 cap actually prevents richer people from escaping from their tax obligations. It is a tax revenue conserving measure from the government.

If you look carefully at the design of CPF, it is designed to benefit low to middle income people more than upper income people.

I was having a similar discussion with a Singapore friend who owned an accounting firm in Australia, dealing mainly with taxation matters. Given his wealth of taxation experience in Asia and now in Australia, he lamented at the sorry state of our taxation system where the balance is tilted too much for the high income earners and the rich. He shared the view of cpf as a form of indirect tax which burdened the low income people unfairly. An example was a gross income of $10k would have a cash back of $9k while a $5k income would have only $4k. Not only cpf, sg do not have gst free basic food and medicinal supplies. A few hundred dollars have vastly different meaning for the poor and rich. The vouchers given at the moment is too little or derisory. To him, the system or rather the principles are not sound.

[GPD]

Academics and economists in the US or in general are split into two camps - the right leaning ones who tend to be Republicans, and the left leaning ones who tend to be Democrats. The Republican types call for less taxes for the rich and support trickle-down economics. This has largely been the dominant model since 80s Reagan and responsible for the state of the rich-poor divide and inequality today.

I read the article, the same way as I read analyst reports. I focus on facts presented, rather than the opinion of author.

What your opinion after digested the facts (in this case the numbers) presented? Let's forget the author opinion.

Agreed on the figures but the beer might not cost that much if not for the 9th or 10th man.

Addition:
Obviously the bar can still make profit on $80 so we can look at it another way, because of the 9th or 10th man, the bar charge $100 instead of $80.
The fifth man pay $1 more
The sixth man pay $1 more
The seventh man pay $2 more
The eighth man pay $3 more
The ninth man pay $4 more
The tenth man pay $10 more

Also, the overseas atmosphere may not be that somewhat friendlier as well. They can threaten to move but any new places they find, sooner or later other wealthy people will follow and once the their number increased, the same problems and issues will reoccur again. Move again after that? This issue is already a hot topic in many countries. The wealth knows this. Frankly their choices are limited and getting leeser by the day.

[CY09]

Hi,

I see CPF in a different light. Let me present the facts. For CPF members, majority of us will earn an estimated weighted average of 3.6% pa from the amount in the 3 CPF accounts. This amount beats inflation slightly. Many will now know, the CPF proceeds are deposited MAS and then to GIC and past records shows GIC generates a 6.5% p.a for past 20 years.
Individuals will keep telling me not to link GIC returns to CPF returns. However, I am curious is where has this surplus gone because I deem the investment returns and CPF interest as a rather wide gap to be ignored

For one, the excess returns earn is not channelled to govt expenditure as we have a balance budget. This means the difference of 2.9% each yr goes into our national reserves and accumulates. It is also possible part of the interest accrued from the excess amount returns into the budget as net investment returns (since CPF proceeds are lumped together with all of Singapore assets)
So for many of us CPF members, the surplus that our proceeds generate are mainly stored in the national reserve and not returned. This money can be viewed as being passed to the future generation of SG. However, this absolute amount of excess returns is staggering because VB members will know compounding it 2.9% p.a. over 30-35 years provides a staggering amount.

[CY09]

For those who argue usinge the bank analogy of its all right for a bank to borrow 1% from depositors and earn 4% loan. Let me remind you that the cpf is administered via a social entity and not a profit making bank

[Temperament]

We are effectively paying a minimum tax of 36% on top of our income tax... but our social benefits pale in comparison to other countries with similar level of taxes.

It's also funny that contribution is capped at 5,000. So the people below averaged are effectively "taxed" more than the one above the average income bracket... So much for income redistribution.

Going by the logic of self sufficiency, CPF contribution should not have a cap. Living expectations varies pretty much according to income level... so 1.2k/mth may be sufficient to a typical singaporean worker. Same may not be sufficient to someone who have been earning 10k/mth or in the case of our leaders, 8k/day

I would agree with piggo.

Consider this. The low returns of the cpf and stagnating wages of low income groups, in addition to the emphasis on self sufficiency (i.e. lack of social safety net), pushes up the savings rate of singaporeans significantly. The savings are then channeled to feed investments.

However, this is also a huge implicit tax on the masses because effectively wealth is transferred from the savers to the investors. Through this implicit tax, the masses have contributed to nation building but enjoyed a less than proportionate share of increase in wealth. In the past the rising tide lifted all boats and everybody was happy. Now that the cost of living has caught up, isn't it right to give something back?

Apart from reforms in the CPF, I like to see more wealth taxes. The reestablishment of estate tax would be a nice start (not likely since theres so much vested interests. can already see a lot of people shivering in their pants.)

i think Malaysia and HK. have no estate tax for a longtime before Singapore relented to join them. i remember Pinky or someone in the G said estate tax still yielded quite a sum for the G's coffer.
But Singapore wants to be one of the "Financial Centres "of the world, so is estate tax holding the Richs of the world to park their money here? Out goes estate tax lol!

The latest happening is Singapore wants to be one of the GOLD TRADING Centre of the World, so Goh Say Tax has been removed from trading of gold. Is it still only in gold bars and not gold jewellery?
Out goes GST on GOLD TRADING lol!

But unlike HK's duty free on wine, Singapore has increased the duty on wine, liquor and beer.

Do you know how much a local can of 323 cc Tiger Beer cost now in NTUC. Super-mart? $2.90.
Poor local man-in-street how to have the "Give The Man A Tiger" moment now?
It has become a "Luxury item too", only for the better off.
i bet the duty on WINE, LIQUOR or at least for BEER will come down soon.
Why?
Our G has lost touch with the common people ability to pay lah. imho.

[kichialo]

Academics and economists in the US or in general are split into two camps - the right leaning ones who tend to be Republicans, and the left leaning ones who tend to be Democrats. The Republican types call for less taxes for the rich and support trickle-down economics. This has largely been the dominant model since 80s Reagan and responsible for the state of the rich-poor divide and inequality today.

I read the article, the same way as I read analyst reports. I focus on facts presented, rather than the opinion of author.

What your opinion after digested the facts (in this case the numbers) presented? Let's forget the author opinion.

It is a cute tale. But fallacious and aimed to argue for less taxes for the rich. What is borne out in the real world shows otherwise.

If the 10th man leaves the table. It just means there is now more beer for the rest. Also it is assumed that the price of beer or the bill is fixed, which is not the case if demand drops as one less drinker now.

So like I said, cute story.

[Ben]

Academics and economists in the US or in general are split into two camps - the right leaning ones who tend to be Republicans, and the left leaning ones who tend to be Democrats. The Republican types call for less taxes for the rich and support trickle-down economics. This has largely been the dominant model since 80s Reagan and responsible for the state of the rich-poor divide and inequality today.

I read the article, the same way as I read analyst reports. I focus on facts presented, rather than the opinion of author.

What your opinion after digested the facts (in this case the numbers) presented? Let's forget the author opinion.

It is a cute tale. But fallacious and aimed to argue for less taxes for the rich. What is borne out in the real world shows otherwise.

If the 10th man leaves the table. It just means there is now more beer for the rest. Also it is assumed that the price of beer or the bill is fixed, which is not the case if demand drops as one less drinker now.

So like I said, cute story.

I think there are some good points to ponder. Yes, if the 10th man leaves, demand drops and beer may become cheaper. But, cheaper beer is not going to benefit the first four men, as they are not paying anything in the first place. Beer price will have to drop to zero to benefit the first four men in this story. I also doubt beer price will drop significantly enough to benefit the 5th to 7th men.

[Temperament]

i think we forgot something. The Richs usually don't drink BEER, but wine and liquor.

[GPD]

Academics and economists in the US or in general are split into two camps - the right leaning ones who tend to be Republicans, and the left leaning ones who tend to be Democrats. The Republican types call for less taxes for the rich and support trickle-down economics. This has largely been the dominant model since 80s Reagan and responsible for the state of the rich-poor divide and inequality today.

I read the article, the same way as I read analyst reports. I focus on facts presented, rather than the opinion of author.

What your opinion after digested the facts (in this case the numbers) presented? Let's forget the author opinion.

It is a cute tale. But fallacious and aimed to argue for less taxes for the rich. What is borne out in the real world shows otherwise.

If the 10th man leaves the table. It just means there is now more beer for the rest. Also it is assumed that the price of beer or the bill is fixed, which is not the case if demand drops as one less drinker now.

So like I said, cute story.

I think there are some good points to ponder. Yes, if the 10th man leaves, demand drops and beer may become cheaper. But, cheaper beer is not going to benefit the first four men, as they are not paying anything in the first place. Beer price will have to drop to zero to benefit the first four men in this story. I also doubt beer price will drop significantly enough to benefit the 5th to 7th men.

Yes but look at it from the other direction. The 10th created an increase in demand but a disproportionated increases in price. The presence of the 10th man can skewed the price elasticity to the disadvantages of the other 5 or 9 men.

[Temperament]

if the RICHS can pay for their deaths, there will soon be no Poor Man left.