Will minimum wage laws work here?

[mummy1234]

It is going to be bit hard to track foreign properties.

Let's just focus on the ownership of local properties. Increase the tax rates for ownership of 2 or more local properties.

ABSD is just a 1 time fee to deter short term trading of properties. Maybe can consider refunding the ABSD if the property is held for 10 or 15 more years.

But I am against any capital gain and estate taxes. These taxes will definitely hit the majority of middle income people.

We can set the taxes such that it is only applicable to more than x amt of capital gain or inheritance to spare the lower and middle income. Eg if capital gain more than S$1 mil then get taxed and progressively more as the gains get more...would it be considered progressive tax? Similarly only those that say inherit more than S$1 mil then get taxed. Wouldn't it be better than having 20% gst in future?

 

[mummy1234]

I really cannot make sense of what you wrote, fzhfzh. I don't see any logical arguments there, just a lot of subjective arguments. And it's just not true that a wealth tax would discourage excellence and encourage mediocrity. That's utterly, patently absurd.

Government has to raise revenues somehow, and if it's not in the form of a modest wealth tax on the top ~0.06% wealthiest households (Senator Warren's proposal for example) -- with no material impact on the amazing lifestyles that those households enjoy(*) -- then it has to be in other forms. If you have a specific proposal for some other way to raise at least the same amount of revenue, then by all means let us know what it is.

(*) The only impact is that those few households will have a minor incentive to spend more on goods and services in the here and now, not less. That is, at the margins, their lifestyle experiences will be even more lavish and more amazing.

Yes and I read that Bill Gates networth got higher even as he gave away billions of dollars to charity as he invests quite a lot in equities.

 

[Mecisteus]

We can set the taxes such that it is only applicable to more than x amt of capital gain or inheritance to spare the lower and middle income. Eg if capital gain more than S$1 mil then get taxed and progressively more as the gains get more...would it be considered progressive tax? Similarly only those that say inherit more than S$1 mil then get taxed. Wouldn't it be better than having 20% gst in future?

1) Where did you read that fake 20% GST news? Current is 7%. Gov won't be so crazy to jump to 20% so fast.

2) The problem is that SGX trading volume has been quite muted in the past few years. Evidences are from STI sideways movement and lack of launch for new IPOs. If you implement capital gain tax, I think SGX will die further.

3) Estate tax was just abolished in the last 10 years. So I don't think it will be introduced again so soon.

 

[mummy1234]

1) Where did you read that fake 20% GST news? Current is 7%. Gov won't be so crazy to jump to 20% so fast.

2) The problem is that SGX trading volume has been quite muted in the past few years. Evidences are from STI sideways movement and lack of launch for new IPOs. If you implement capital gain tax, I think SGX will die further.

3) Estate tax was just abolished in the last 10 years. So I don't think it will be introduced again so soon.

There was a snippet of HSK on TV that I saw last night whereby he said even 14% GST also not enough?! Isn't that hinting of more to come? And if re-elected PAP already publicly announced that they will increase GST.

They r already prepping us saying because of rising sea levels, we will need 100 billion! Over the next 50-100 years! How r they going to raise their extra 1-2 billion a year if not via their favourite gst tax? I am just making an intelligent guess as many PAP IBs here already talk of 20% gst. PAP should ask them where these IBs got their 20% figures from.

We all know why estate tax was abolished but people don't want to say it out loud for fear of getting sued...

As I said only tax those getting obscene profits. My idea is that the rich poor gap should not get worse as the years progress...u mean u guys approve of the rich getting richer while the poor gets poorer? Where r yr morals and where r yr conscience?

GST for basic necessities r not even waived. Something which I strongly believe should be done.

 

[limster]

Yes and I read that Bill Gates networth got higher even as he gave away billions of dollars to charity as he invests quite a lot in equities.

I really don't see a need to tax people like Bill Gates more since they are giving away so much to charity. If there was any wealth tax there should be a tax relief for charitable donations to recognise the philanthropy of people like Bill Gates and Warren Buffett

Compared to some rich people who own multiple overseas property and who don't give anything to charity. This is the category that wealth tax should focus on

 

[mummy1234]

I really don't see a need to tax people like Bill Gates more since they are giving away so much to charity. If there was any wealth tax there should be a tax relief for charitable donations to recognise the philanthropy of people like Bill Gates and Warren Buffett

Compared to some rich people who own multiple overseas property and who don't give anything to charity. This is the category that wealth tax should focus on

Yes if someone owns multiple overseas properties and is very wealthy, they should have the wealth tax too...

I definitely don't and am only upper middle class at the most. I have neg savings this year as I semiretired for 2 years. And still I donated S$2k to a charitable cause even though it widened my deficit... cause I feel less stressed after I deleveraged by selling my terrace...my hubby can do the saving for the family...

 

[BBCWatcher]

We can set the taxes such that it is only applicable to more than x amt of capital gain or inheritance to spare the lower and middle income. Eg if capital gain more than S$1 mil then get taxed and progressively more as the gains get more...would it be considered progressive tax? Similarly only those that say inherit more than S$1 mil then get taxed. Wouldn't it be better than having 20% gst in future?

That's exactly what the U.S. already does. There's a US$250,000 per person (US$500,000 per couple) capital gains exemption on a primary residence, and that's net of costs such as remodeling. The U.S. estate tax exemption for 2019 is US$11.4 million, and it's unlimited between citizen spouses.

2) The problem is that SGX trading volume has been quite muted in the past few years. Evidences are from STI sideways movement and lack of launch for new IPOs. If you implement capital gain tax, I think SGX will die further.

A hypothetical capital gains tax in Singapore would presumably apply to the global capital gains of tax residents of Singapore. Sideways movement means little or no capital gains, so that's actually terrific for those who want to minimize capital gains tax.

If the SGX has problems (and it has), it has nothing to do with capital gains tax since there isn't any in Singapore. Even if you think the SGX would be harmed by a capital gains tax (I very much doubt it, but if), the best policy very well might be to "milk the dead cow," because it's already dying.

If there was any wealth tax there should be a tax relief for charitable donations to recognise the philanthropy of people like Bill Gates and Warren Buffett

There already is in the U.S. Charitable contributions are deductible from income tax purposes, and wealth that is legitimately given away to a charity is wealth that wouldn't be taxed under a wealth tax. Charitable contributions both before and soon after death are already not taxed under the U.S. estate tax, which is a wealth tax.

 

[Mecisteus]

A hypothetical capital gains tax in Singapore would presumably apply to the global capital gains of tax residents of Singapore. Sideways movement means little or no capital gains, so that's actually terrific for those who want to minimize capital gains tax.

If the SGX has problems (and it has), it has nothing to do with capital gains tax since there isn't any in Singapore. Even if you think the SGX would be harmed by a capital gains tax (I very much doubt it, but if), the best policy very well might be to "milk the dead cow," because it's already dying.

Investors/traders can choose not to declare their capital gains if they trade with non-regulated brokers like IB. How is the authority going to check on that?

Actually the capital gain tax on SGX stocks will just make investing/trading less attractive. The same reason if a higher broker or exchange fees are imposed.

 

[BBCWatcher]

Investors/traders can choose not to declare their capital gains if they trade with non-regulated brokers like IB.

Yes, they could, and that would be illegal tax evasion. So is failure to pay GST legally owed (via private trade barter arrangements for example), paying employees under the table to avoid income tax and CPF contributions, etc., etc.

How is the authority going to check on that?

Oh, there are plenty of ways, starting with the fact that Singapore and the United States have a standing agreement involving the exchange of data for cross-border tax compliance. Interactive Brokers is required to send lots of data to the U.S. Financial Crimes Enforcement Network (FinCEN), among others. And it does. The Singapore government can get much of that data upon request, and it routinely does. I'm not describing any secrets here. These governments publicly acknowledge that they share such data.

Just to pick another example, tax agencies are also increasingly using social media analytics to figure out who's probably cheating on their taxes. If, for example, your spouse posts about the lavish family safari in Africa to Facebook, that might be quite interesting to IRAS.

Tax agencies also randomly select individuals (and households) to audit.

I'm barely scratching the surface here.

The U.S. collects approximately 85% of tax legally owed through voluntary compliance: Americans just paying their taxes as they should. That's without caning and Changi Prison, two "special" tools the Singapore government has in its arsenal. I'm highly confident IRAS can and will collect the vast bulk of capital gains tax if charged with doing so, just as it collects the vast bulk of existing taxes.

Actually the capital gain tax on SGX stocks will just make investing/trading less attractive. The same reason if a higher broker or exchange fees are imposed.

To repeat, a hypothetical capital gains tax in Singapore wouldn't apply solely to SGX-listed stock appreciation. It'd presumably apply to all capital gains. SGX-listed stocks aren't currently famous for their capital gains, so a hypothetical capital gains tax might actually help SGX-listed stocks.

However, that said, it's not a great argument even if you think a capital gains tax would somehow disadvantage the SGX. The government already effectively heavily favors and subsidizes SGX-listed securities through the CPF Investment Scheme, Supplementary Retirement Scheme, GIC, and Temasek, as notable examples. All that SGX boosterism is still not enough to keep the SGX from descending into global irrelevance. How much more government (i.e. taxpayer) support should there be to try to prop up the SGX?

 

[fzhfzh]

Most companies have their apac hq in Singapore for tax advantages. Singapore also attracts the rich from US and China with tax benefits, and attracts foreign capital with zero capital gains tax. Let’s talk pragmatism, how would it benefit Singapore to be increasing our taxes on the rich?

 

[Merg91]

Angbao to your relatives and extra for your domestic helper?

And still I donated S$2k to a charitable cause

 

[d5dude]

No, it's really not comparatively hard. There are only about 75,000 households that would owe any wealth tax under Senator Warren's plan. The U.S. has a relatively high rate of voluntary tax compliance already. (The IRS estimates that voluntary compliance is about 85% of tax legally owed.) Hire a few thousand auditors to chase the other 15%, and they'll generate a massive return for the government.

And you need to be familiar with how the U.S. tax and financial reporting systems already work. The U.S. government already requires disclosure of foreign financial assets, including those assets only notionally under Americans' control. That started with the Bank Secrecy Act of 1970, so it's been around a long time. Penalties are high for noncompliance, and the U.S. government has successfully prosecuted offenses against these financial disclosure regulations. Every year I (a U.S. person) must file a complete and truthful FinCEN Form 114 ("FBAR") and IRS Form 8938 ("FATCA") because I meet the thresholds for both reports. There's no wealth tax at present, but all this overseas (non-U.S.) financial wealth must already be disclosed annually, by law. That's the status quo ante here. (Foreign real property is not currently generally reportable except in estate tax proceedings, but all income from that real property is.)

Moreover, the U.S. already has an estate tax and has had one "forever," basically -- all the way back to the nation's founding. The first U.S. estate tax dates to 1797. Many U.S. states also have estate taxes. The U.S. estate tax is a tax on the global wealth valued on the estate holder's date of death.

Finally, what other taxes are simpler? GST and VAT certainly aren't simpler. In the U.S. those taxes would involve literally hundreds of millions of consumers and millions of businesses, and they're extremely complicated. For example, the State of Connecticut is right now introducing a sales tax increase on prepared foods, and businesses and the tax regulators alike are struggling to define "prepared foods." (Is an energy bar a "prepared food" for sales tax purposes? Interesting question! How about a frozen pie, but the buyer uses the convenience store's microwave oven to heat it up? Does the store have to charge different sales tax rates depending on whether the buyer heated up the pie in store or not? Another interesting question!) Taxes can be complicated, but so what? If they are complicated, it's far better to assign those burdens primarily to large and wealthy entities to bear. Tax complexity is a fantastic argument in favor of wealth taxes that affect only about 75,000 U.S. households, the wealthiest ~0.06% of households among the over 127 million households in the United States.

Did you read the linked article in my post before writing this wall of text?

You can say what you want but the fact is wealth taxes haven't worked in other countries, the US is unlikely to make it work, just too many problems with it.

 

[mummy1234]

Angbao to your relatives and extra for your domestic helper?

Of course not...

 

[d5dude]

Yes if someone owns multiple overseas properties and is very wealthy, they should have the wealth tax too...

I definitely don't and am only upper middle class at the most. I have neg savings this year as I semiretired for 2 years. And still I donated S$2k to a charitable cause even though it widened my deficit... cause I feel less stressed after I deleveraged by selling my terrace...my hubby can do the saving for the family...

If all the high income people semi retire so young like you there will be no upper class left to tax, dont begrudge the wealthy people, many of them are not like you, I know people who worked very hard to get to where they are today.

 

[BBCWatcher]

You can say what you want but the fact is wealth taxes haven't worked in other countries....

Almost all other countries don't have the global tax responsibility that attaches to U.S. citizenship (and U.S. permanent residence). Thus everybody who doesn't want to pay Country X's wealth tax only needs to do two things: (1) reposition wealth outside the country, and (b) move elsewhere. That simple tax avoidance mechanism simply doesn't work in the U.S. context. It doesn't work now, and it won't work in the future under a hypothetical U.S. wealth tax.

And the U.S. already has a federal wealth tax. It's called the U.S. estate tax. The only material difference with a hypothetical wealth tax is that it's assessed annually (or perhaps biannually), not solely on the date of death of the estate holder.

 

[Merg91]

Really ha?
Don't count the church 'involuntary donations'.
That's for your good.

Of course not...

 

[BBCWatcher]

Singapore also attracts the rich from US and China with tax benefits....

I don't think Singapore is drawing rich people from the United States in particular. Yes, I know about Eduardo Saverin and Jet Li, but the United States was only a temporary stopover for both of them. Highly profitable stopovers for the U.S. Treasury, still. Way, way more profitable than for Singapore.

Are there any other notable examples?

 

[fzhfzh]

I don't think Singapore is drawing rich people from the United States in particular. Yes, I know about Eduardo Saverin and Jet Li, but the United States was only a temporary stopover for both of them. Highly profitable stopovers for the U.S. Treasury, still. Way, way more profitable than for Singapore's coffers.

Are there any other notable examples?

Rich doesn't just mean people, but their money. You can park your money in Singapore with a trust fund or pass through entity and invest your capital from Singapore for tax free gains. Yes as an individual you get taxed on income no matter where you are if you are an US person, but if you put your capital into a Singapore based company and invest from it, as long as you don't cash out to US, you don't have to pay tax on the gains. Singapore is basically the Ireland tax haven of Asia, what's in for Singapore to ruin it all?

Why do you think all the APAC headquaters for google, facebook, uber, dyson etc are all located in Singapore?

 

[BBCWatcher]

Rich doesn't just mean people, but their money. You can park your money in Singapore with a trust fund or pass through entity and invest your capital from Singapore for tax free gains. Yes as an individual you get taxed on income no matter where you are if you are an US person, but if you put your capital into a Singapore based company and invest from it, as long as you don't cash out to US, you don't have to pay tax on the gains.

What you're describing doesn't legally work for U.S. persons, far from easily anyway. And Singapore simply doesn't rank on the list of best places even to attempt what you're describing.

I think you might conflating U.S. persons with corporations, and you shouldn't conflate them when discussing tax situations.

Why do you think all the APAC headquaters for google, facebook, uber, dyson etc are all located in Singapore?

Substantially but not solely for tax reasons, but that's for corporations (Dyson isn't a U.S. corporation), not for U.S. persons.

As a sanity check against what you're describing, where are the investment firms and advisors in Singapore that are marketing U.S. tax avoidance plans and structures based in Singapore to wealthy Americans? It should be relatively easy to find their Web sites and other "calling cards," for example. I don't see evidence that there's any such cottage industry in Singapore, at least not to any great degree. It's rather the opposite: plenty of investment firms and advisors in Singapore won't touch Americans.

....What are you trying to argue here, fzhfzh? That because illegal tax evasion and legal tax avoidance exists, tax authorities and their governments shouldn't even try to levy and collect taxes from the wealthiest and highest income entities? That they should just give up, and slam the middle class and even the poor with tax burdens since they're less able to evade or avoid taxes? Is that what you're trying to argue? If it is, I entirely disagree.

 

[fzhfzh]

What you're describing doesn't legally work for U.S. persons, far from easily anyway. And Singapore simply doesn't rank on the list of best places even to attempt what you're describing.

I think you might conflating U.S. persons with corporations, and you shouldn't conflate them when discussing tax situations.


Substantially but not solely for tax reasons, but that's for corporations (Dyson isn't a U.S. corporation), not for U.S. persons.

As a sanity check against what you're describing, where are the investment firms and advisors in Singapore that are marketing U.S. tax avoidance plans and structures based in Singapore to wealthy Americans? It should be relatively easy to find their Web sites and other "calling cards," for example. I don't see evidence that there's any such cottage industry in Singapore, at least not to any great degree. It's rather the opposite: plenty of investment firms and advisors in Singapore won't touch Americans.

....What are you trying to argue here, fzhfzh? That because illegal tax evasion and legal tax avoidance exists, tax authorities and their governments shouldn't even try to levy and collect taxes from the wealthiest and highest income entities? That they should just give up, and slam the middle class and even the poor with tax burdens since they're less able to evade or avoid taxes? Is that what you're trying to argue? If it is, I entirely disagree.

Corporations are by definition, legal persons. Yes it does work for layman US persons unless you are misunderstanding what I'm saying. No one have to advertise it, when you invest in a corporation like Apple, the corporation has to exercise it's fiduciary duty to avoid as much tax as legally possible.

If you are the country benefiting from legal tax avoidance, yes, you shouldn't be trying to kill the golden goose.