Like most people, I dislike paying taxes. However, there are a lot of people that are misled by media and their lack of knowledge.
During the US presidential elections, there are just simply too much lies and misinformation. This seems to be true in many communist or dictator controlled governments as well. One very common lie and misinformation used is: "Lowering tax for the rich grows the Economy."
I just have 1 observation, for countries like China, there are many Millionaires and Billionaires. the tax rate is relatively low compared to US and Europe, and many of these rich Chinese want to go to US and Europe.
There are some countries that have no income taxes at all.
United Arab EmiratesThe United Arab Emirates has one of the world's highest per-capita incomes, $48,200, and has no personal income or capital gains taxes.
Instead of generating revenue from income tax, the country, which is the third-biggest exporter of crude globally, is dependent on taxes from oil companies that pay up to 55 percent in corporate taxes. Foreign banks pay about 20 percent. Oil revenue, for example, accounted for 80 percent of consolidated government income in 2010, while income from various taxes, fees and customs duties made up less than 12 percent, according to government statistics.
While expatriate employees don’t pay for social security in the Arab country, UAE citizens must make monthly contributions of 5 percent of their total earnings for social security. Employers of citizens also have to make monthly contributions of 12.5 percent of the worker’s base salary for social security and pensions. Other indirect taxes include housing fees, road tolls and municipal taxes. The UAE charges a 50 percent tax on alcohol, and if a person has a liquor license and buys alcohol to drink at home, an additional 30 percent tax is charged.
QatarGas-rich Qatar became the world’s richest country this year with GDP per capita of more than $88,000, according to Forbes.
Relying on its natural gas reserves — which are the world’s third largest — for revenue, Qatar has invested heavily in infrastructure to liquefy and export the commodity. The country levies no taxes on personal incomes, dividends, royalties, profits, capital gains and property. Qatar nationals, however, have to pay 5 percent of their income for social security benefits, while employers contribute 10 percent for the fund.
Earlier this year, reports surfaced that the government was considering a value-added tax in an attempt to broaden its revenue base and reduce its non-hydrocarbon deficit, which was equivalent to 17 percent of the country’s GDP last year. Other indirect taxes include a 5 percent charge on imported goods.
OmanLike neighboring Middle Eastern countries, Oman derives the majority of its revenue from crude oil. The country’s oil revenues increased 35 percent in April to $8.49 billion compared to the same month last year and accounted for over 71 percent of the sultanate’s total revenues. Although, there is no individual income or capital gains taxes in Oman, citizens must contribute 6.5 percent of their monthly salary for social security benefits. A stamp duty of 3 percent is also charged on the purchase of property.
Despite its oil wealth, Oman has recently been rocked by a series of protests by residents demanding jobs and employment benefits. Several strikes at petroleum plants;over pay and pensions have seen activists jailed in the biggest labor strife in Oman since protests last year against corruption and unemployment triggered by the Arab Spring. There’s growing resentment in the country over the jobs offered to 800,000 expatriates, while the unemployment rate for citizens was 24.4 percent in 2010 and is rising, according to the International Monetary Fund.
As the world’s sixth-largest oil exporter, Kuwait’s oil revenue of $63.5 billion between April and November of last year, accounted for 95 percent of the government’s total revenue in the period.
While there is no income tax in the country, Kuwaiti nationals must contribute 7.5 percent of their salary for social security benefits; their employers make an 11 percent contribution. Despite being one of the world’s wealthiest countries per capita, strikes and protests by public sector workers unhappy about pay have led the government to introduce a 25 percent increase in wages. The IMF, however, warned Kuwait in May that such spending could impact the sustainability of its public finances . Only 7 percent of Kuwaitis work in the private sector, and the rising cost of retirement could put pressure on government spending.
Kuwait is no stranger to political turmoil, ushering in four new parliaments in the past six years. The country has been marred with corruption scandals implicating key political figures, while poor parliament-government relations have hampered policymaking. The IMF has recommended that Kuwait introduce a value-added tax and comprehensive income tax system.
Well known as an offshore financial center, the Cayman Islands are a big draw for the wealthy with its zero personal income and capital gains taxes and because it has no mandatory social security contributions.
Employers, however, are required to provide a pension plan for all workers, including expatriates who have been working for a continuous nine months in the islands. While there is no value added tax or government sales tax, the country does have some indirect taxes such as import duties, which can range up to 25 percent.
A high standard of living in the Caymans also means high property prices. The average cost of an apartment in April was over $550,000, while the average cost of a house was more than $736,000, according to government figures.
With no personal income tax, Bahrain relies on output from the Abu Safa oilfield, which is shared with Saudi Arabia, for about 70 percent of its budget revenue.
For social security benefits, citizens contribute 7 percent of their total income to the government, while expatriates pay 1 percent. Employers must also make a contribution of 12 percent of a citizen’s income for social insurance, and pay 3 percent for expatriate employees. Other indirect taxes include a stamp duty of up to 3 percent of the value of the property on real estate transfers. Expatriates also have to pay a 10 percent municipal tax for renting a home in the Persian Gulf state.
Despite its oil wealth, Bahrain had a budget deficit of $83 million in 2011 and is considering issuing an international bond . The country has also been in turmoil from pro-democracy protests by majority Shi’ite Muslims against a Sunni-dominated government. The protests began in February 2011 and followed uprisings in other Arab nations.
Considered one of the world’s most affluent countries, Bermuda also has among the world's highest cost of living.
While there is no income tax, workers may be asked by employers to contribute up to 5.75 percent of a 16 percent payroll tax that the employer has to pay to the government on the first $750,000 of an employee’s income. Workers also have to pay $30.40 per week toward social security insurance, which is matched by the employer. Other taxes include a property tax of up to 19 percent depending on the annual rental value of the land determined by the government. A stamp duty also applies to inheritance/estates from 5 percent to 20 percent depending on the property value.
Custom duties levied on imported goods are a major source of revenue for the government. Individuals relocating to Bermuda are charged 25 percent for goods they bring. Given its relatively low taxes, the country is a big draw for international firms, with more than 20 percent of its population being foreign-born. However, a 10-year work permit in the country costs a whopping $20,000.
Among the wealthiest Caribbean countries, the Bahamas features an economy that's heavily dependent on tourism and offshore banking.
About 70 percent of government revenue comes from duties on imported goods. Even though there is no personal income tax, employees have to contribute 3.9 percent of their salary, up to a maximum of $26,000 annually, for a form of social security called National Insurance. Employers also have to contribute 5.9 percent of a worker’s salary for National Insurance, while self-employed individuals are charged 8.8 percent. The country also has a property tax of up to 1 percent.
Despite its prosperity as a financial center, The Bahamas has an unemployment rate of 15 percent and the political parties are feuding over oil exploration projects in its waters that could come at the cost of tourism.
It seems that having no income tax does not attract many companies at all. It does attract rich people who do not pay taxes, and that does not seem to help much in the economy, which the people pay in some ways or another.
In Singapore, there are no capital gains tax, but a Honda Civic or small car could cost $100k easily. The cheapest apartment you can buy in Singapore on the resale market is around $200k, and it costs a lot just to get to town by any transportation means as the further you stay, the more public transportation would cost.
Why Lowering Taxes For The Rich No Longer Works To Grow The Economy
Why not? You may ask... but leave more money in the hands of those who will use the cash to expand their businesses and the result will be increased prosperity, including the jobs that logically arrive during a period of growth. However, when there are other better opportunities out there, they will leave, and take everything away -- without paying any taxes -- at all.
And this is evident. In the 8 years of President Bush, there was a reduction of tax for the rich but it does not seem to do much for the economy, but you do see a lot of outsourcing of jobs and building of infrastructure overseas and jobs leaving the country.
While supply side economics may have been responsible for some very healthy economic growth, it came at the price of a substantially increased federal deficit. What many forget is that it was during the Reagan years that we went from being a creditor nation to a debtor nation as President Reagan was required to borrow heavily in order to make up for the income shortfall that resulted from so massive a tax cut.
Indeed, Reagan, himself, deemed the rise in the national debt during his term to be the greatest disappointment of his presidency. And lets look at Bush... or not... as you know the story.
I don't understand how many rich people can be so daft as well. They believe that they will pay more taxes and end up with less when they earn too much. There are people who own businesses that believe that if they go from earning $300k to $249k, they will pay less taxes.
In a way that is true, but the increased tax rate is only for the amount they earn that exceed $249k and not for the whole amount they earn. So by not earning the extra amount above the $249k does not help much at all.
I am all for attracting foreign investments to the country, but to offer low taxes, no capital gains or other tax incentive? I do not see it as even a feasible solution in the long term. If these rich people are not interested in paying taxes, I do not welcome them in my country.
I feel that the taxes should be spent on infrastructure, education and sustainable resources. With 50% of the world's population living in the urban areas, it will pose a lot more challenges as more people move in, and resources are required to improve infrastructure. Taxing the already poor people with a flat tax while the richest people who do not need the money use their money on investments, properties which they earn more from the poor.
Although this may seem all legal, it is not right. Earning money without putting in any effort and having a CSR which spends 5% of the profits on charitable activities does not make you a saint.
-- Iron Bowl