We were discussing the raise of GST in class just now and there were supposedly emails circulating stating that the aise in GST will benefit the wealthy. It is apparently an assumption that we thought would be a good subject to discuss about.
So why the rise in GST would benefit the wealthy in Singapore? Well before i go into that let's firstly indicate that GST alone has incured billions of dollar last year...so the government thought "Why not increase it to 7%?"
In the US, where they have been experiencing budget deficit for as long as the American history runs, tax cuts have benefited the wealthy. And by the way during Bill Clinton's term, he managed to reverse it to become a Budget Surplus but when George Bush took over in 2001 (maybe due to bad luck) he used up America's Budget Surplus...all of it and they have incurred 5.5 billion dollars in Budget Deficit in 2004! Who's gonna pay for that now??? The War on Terror, Iraq War and the natural disaster in the form of Hurricane Katrina apparently are the reasons/sources why there was a Budget Deficit.
So why will the rise in GST will benefit the wealthy? From my understanding, it is merely because of something that has to do with quota...or probably income tax.To cut the story short, the wealthy will be bringing home more take-home pay and therefore they will be ale to spend more...
So how does tax cuts in the US benefits the wealthy but at the same time this leads to the weakening of the USD...this is can't realy seem to understand...when Mrs Chng was explaining, my head was already spinning and my brain had turn off! Basically it has something to do with the related of loss in confidence in the US and abroad.
Reports also mention that Bush's administration is not doing much to improve their BOP...
INTERESTING...ISN'T IT?
