When does a tax becomes a subsidy?
Ans. When that tax had been around long enough to be depended as
revenue to fund social programmes. If without these tax monies,
some social programmes may be curtailed or underfunded.
For example:- there are est.500,000 cars in Spore. Straits
Times, sat, oct 20, 2007
Avg km/car per year = 20,000km ( 15,000 to 25,000)
litres used =
1,666litres ( base of avg 12km/litre)
Fuel tax received = 1,666 X $0.40cts X 500,000 cars (40cts
per litre)
=
$333.2 million
These are only rough figures, would be lesser if based on
previous years car population.
But still, it is an est $300million tax which is not going into
some politician's pocket, but for social funding, such as
maintenance of smooth roads, MRT works and projects, traffic
lights, road signs, etc, etc, for the other 3million non-car owner
citizens who use such roads to go to work, school and
recreation.
If we cut away this tax, we will have lost one
revenue for such works and will have to dig into our reserves.
Thus it becomes our society must subsidize car owners, as they are
the heaviest users of our roads ( being that a space 5m long sits
only 1 person compared to public transport of 8-10 persons on
the same space).
Similarly, GST can be called a subsidy instead of
tax, because our cents paid to gst are used to
subsidise other citizens for social programmes.
Do remember that we own no natural resources. We don't
have any royalties significant enough to collect from. All we
have to help our fellow citizens for this generation and the
next are taxes, as the previous generation had done.
Such taxes are not crippling, as it is based on free will and
not forced. But if all cry out for tax to be removed and give more
handouts, then Either we crawl back to Msia for economic support
and speak Bahasa Msia or we help one another to maintain our
independence and multi-racism.
PS: However, the issue here is that cutting away the tax or
subsidy will only help oil price to raise. Simple economics.
Although the amount we use is small as compared to heavy
users such as China or USA, but if every nation big or small
thinks their amounts are insignificant and don't do
anything, oil price will continue to climb where no oil
price had gone before!