Thursday, December 07, 2006

Ding Dong the Witch is Dead!

The Hong Kong government officially abandoned its plans for a GST this week.

It is now seeking a more socially palatable tax and is considering, among other things a Capital Gains tax. These people just go from bad to worse. One of the strengths of the Hong Kong economy is that every body saves. The population as a whole saves nearly 20% of their income. A capital gains tax discourages saving and investment and amounts to a double tax on income. It would also hit the middle classes here very hard.

Hey Henry Tsang, has anyone ever told you you are aren't as smart as you think you are?

Because I believe in civic responsibly, I am going help Henry. I am going to propose taxes that would be neither repressive nor onerous and would not not have a devastating effect upon the poor that the GST or Capital gains taxes would have. Some of these are serious and some are tounge in cheek. I'll let Mr. Tsang decide which is which

1. A flat HKD$1000.00 tax on every shipping container that leaves the port of Hong Kong. This would be easy to collect and raise about 20 billion a year. Since it would only apply to goods shipped from or transshipped through Hong Kong it would be a tax that is paid by people in other countries. Since the value of a container of goods can be millions it is actually a trifling tax and the people who purchased the goods in the container could simply pass the increased cost along to the consumers in the destination country.

2. A imaginary square footage property tax on developers. This would be a tax on the difference between the advertised size of a flat and the actual interior size. Thus if a developer builds a flat that is advertised at 1200 square feet and the interior actually measures 800 square feet then the developer would have to pay a tax on 400 square feet a year for as long as the building stands. The rate for this should be some thing like $25.00 a square foot. The tax would be non-transferable so that the builders could not slide the tax into a management fee. Existing buildings would be exempt from this tax but the floor space would have to corrected when the flat was sold. This might not raise a lot of money but it would go a long, long, long way toward making the Hong Kong real estate market more honest.

3. A flat $100.00 tax on any new cell phone with a new price of over HKD $2500.00

4. Tax the contracts of Filipino and Indonesian maids. If you are rich enough to afford a maid you are rich enough to be taxed for it. How about making the tax equivalent of 1/2 the total cost of the contract. (Note, this a tax paid by the employers of the maid not by the maid)

5. Quadruple the amount of taxes on everything associated with private automobiles. License, purchase fees, petrol everything. Nobody needs a car here anyway. Clearing the roads of the arrogant, unsafe drivers who think the are a superior species would make Hong Kong a safer place and the government might not need to build that extra freeway through Central.

6. Impose a one time "Your sooooooooooo ugly" tax of about $60 billion on Nina Wong.

Until Next Time
Fai Mao
The Tax Expert Blogger

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