Hello MSI, As you already know, I live in HK and hold these views and those positions Subject 53084
On the subject of property taxes and services for those taxes, HK is very focused.
Firstly, HK has a flat tax on HK generated active (read 15.5% salary, 16.5% net profit) income above a certain number (I think over USD 20k per annum, but am not sure). We get tax benefits for mortgage interest, supporting elders, charity.
There are no taxes on dividend, interest, capital gains, gambling, and offshore generated (factory in China, market in US, even if HQ in HK) income.
Our tax form is one page long, filled out by the government based on employer submitted data and corporate tax return accounting statement. We only need to sign and pay.
So, as such, government tax receipt from such sources do not pay for much of anything, except for basically free medical, police, fire, and education (K1-K12), and defense (we pay China a fee for its garrison here) services, and hardly anything else. HK is one of the most densely populated and heavily policed areas in the world, and one generally feel very safe at all hours in most places. The educational services seem to work well for K1-K12, and the three universities are subsidized and regionally competitive.
Private alternatives to public medical and education services are plentiful at a variety of cost/benefit levels.
The roads (USD 800/year for my car with its 2 litre engine capacity) and water (not consequential) services are user fee based.
Much of the infrastructure in HK (subway, bridges, tunnels) are privatized in the form of public listings or operating concessions.
The property tax is less than 0.2% (x 0.002) of value and pays for street cleaning, garbage disposal, sewage treatment, park maintenance, and hill/slope maintenance. The assessed value of property is uniform, by square footage, depending on the neighborhood.
I cannot find any argument against any tax system that so simple to understand, easy to account for, and focus in its use.
We are suffering a budget deficit now due to infrastructure spending and bad economy, and are digging into previously built up surplus, which, at current rate, will run dry after about 8 years. There is tremendous reluctance for the govt to raise tax and for the public to have taxes raised, and so, as a first step, 160,000 civil servants will be booted within the next 4 years, and for the remaining, an average 10% pay cut, just to start off:0)
Any jigging with the HK system against the popular wish without concurrent control on now free capital flow will see capital flight, as in people voting with their cash, and any capital control will see HK destroyed.
Chugs, Jay |
