Thursday, April 3, 2014

It is wrong to pay two taxes

I won't go so far as Andrew Loh to suggest crony capitalism. They are more like leeches the government tolerate but for how long will depend on the public.

I had wanted to blog about this when it first appeared in AsiaOne.

Yahoo opens the story as follows:

Most of Singapore's super-rich achieved their wealth via bricks and mortar rather than through creativity and innovation, according to media reports quoting Forbes.
In fact, half of the republic's 16 billionaires achieved their wealth from hotels and real estate, while half of the 50 richest persons in the republic are property tycoons as well. This is based on Forbes list released in March and the Top 50 Rich List published last August.

To me we pay two taxes. One to the government and the other to these property types. They are leeches who add little to no value to our economy. I am tired of coming across this old food stall, some decades old restaurant etc., ceasing business because of rent. Sure, they also complained about failing to find workers but I know the problem would be far less severe if less go to rent and much more go to workers.

Please don't tell me property prices and rent are set by the market. That is a lie. Wait till people become even more emotional and unreasonable, the leaders will have a problem that is nearly impossible to solve. Fortunately for us Hong Kong and London are ahead of us on this fools' errand. May be we can pull back after we see one or both fall off the cliff but it would be ugly for everyone by then. Those economies with saner and regulated property markets will come off relatively better. These are the ones who do not have half of their richest made it via real estate. It is a confirmatory sign that something is deeply wrong about our economy.

Related: Londoners Priced Out of Housing Blame Foreigners


  1. Well said...! Tokyo tried this before in the 80s/90s and hurt badly but has the hinterland to buffer all these spill over... what do we have, nothing! it will hurt badly with no return path...

  2. There's a 3rd tax we paid -- the difference between what we earn as interest on our CPF and the amount that the CPF fund itself earned (reportedly, >16% annual returns since inception). In any other countries (Malaysia, Norway etc), when citizens compulsorily save and the fund manager uses that funds to invest, most of the returns should really go to the owners (ie. its citizens). In this case, we're paid a fixed, small, rate ... and then told that we have not saved enough for our own retirement. That too, is a tax, isn't it ?

  3. Commercial ent maynot be the straw that will break the camel's back. It is your 30 year loan for a HDB flat that will turn the young generations against what we had built up the last 50 years. The previous minster in charge of public housing should be made to account for his failed policies

  4. It is sad we fall for the same sin of financialisation. How many leverage themselves on loans to own second or third house and as they are really not needed for purpose of a roof over the head, they are keen to fuel rising property prices and rentals That sadly deprives a lot of people who cannot afford to even rent, least own one.

  5. the rule is simple

    if it moves like a rat, smells like a rat, and sounds like a rat

    then thinking a dog is a case of lying to yourself

  6. The reality is staring us in the face! Wake up! It is a "Consumers" society.