Thursday, May 03, 2018

Removing GST may result in higher taxes in the future

Sun Daily - Pakatan budget: A replay of Reagan’s tax cut? (extracts):

Close examination of Pakatan's alternative budget suggests the opposition coalition's fiscal projections are based on optimism rather than realism.

Last year, GST corralled RM44 billion in government revenue (Pakatan's assumption – RM42 billion) while SST raised RM17.1 billion in 2014 (Pakatan's estimate – RM16.5 billion).

Theoretically, this will create a gap of RM26.9 billion based on government data against Pakatan's forecast of RM25.5 billion.

Pakatan claims removing GST and substituting it with SST could stimulate business activity, fuel higher consumer spending and, in turn, boost government revenue.

This argument was peddled by supply-siders in US President Ronald Reagan's administration and, more recently, by proponents of US President Donald Trump's tax cut.

Enacted in 1981, Reagan's tax cuts were so large that projections of a worsening budget deficit forced Congress to raise taxes in 1982, 1983, 1984 and 1987 while later presidents signed off on tax increases – George H.W. Bush in 1990 and Bill Clinton in 1993, David Wessel, Senior Fellow, Economic Studies at Brookings Institution noted in a recent article.

"One lesson from that history: When tax cuts are really too big to be sustainable, they're often followed by tax increases," he wrote.

Pakatan may argue its budget proposals don't amount to a tax cut because GST will be replaced by SST. I disagree – creating a significant fissure between government revenue and expenditure is effectively a tax reduction.

More worrying, will Pakatan's proposed removal of GST and re-introduction of SST have a deleterious impact on Malaysia's budget deficit? Like Reagan's tax cut, could this result in higher taxes in the foreseeable future?


  1. wah, working really hard for your dedak kpi

  2. Malaysia's conventional economic establishment is full of Governmnent parrots and ball-carrier.

    For example , none of them dare criticise a patently bad Najib promise to arbitrarily raise the minimum wage by fiat.

    An honest economist or business owner will tell you that is a job destroying move that simply pushes up business costs and will drive many small businesses out of operation altogether.

    That Ktemoc simply regurgitated their ball-carrying statements shows his ignorance of real business and economics .

  3. No! to GST or SST.

    People need to Eat and find Work now! Not, worry about higher taxes in future.


    1. Nostro Pig? What's your fucking solution. I know you are in cahoot with cheebye kaytee. So tell me your fucking solution. Else fuck off

    2. You have to pay me for the solution.

      It's actually very very simple.

      No need GST or SST.

    3. Correct. No to GST & SST. No to income as well. Everyone shall fairly get their food coupons ration.

  4. Don't just focus on the collection. What about government spending. Don’t build the ECRL for a start, that is a savings of 50B spread over 10 years or so. Even with a special low-interest loan from China it’s economically risky. Instead, spend a couple of billion upgrading ports along the east coast (KB, KT, Kuantan) ship the goods (what goods are we taking about anyway?) to Port Klang, which is already being upgraded, North Port, West Port etc. Makes more sense to ship rather than rail, because ultimately whatever you rail in the east is going onto a ship in Port Klang anyway. Passenger traffic? For a few hundred million upgrade airports along east coast and if passenger traffic really does increase let AA, Malindo and MAS take care of that. They will just fly bigger planes.

    1. Plus the fact that enforcement is so poor and too many exemptions especially for foreigners and cheebye kaytee.

      An chua, kaytee? Tell me how much you have contributed to Malaysia GST. You mean you fly back everyday to Malaysia from Oz land.......and you don't claim GST exemption

      I have doubts you are fucking patriotic

    2. Not sure what you pointing at, because Kuantan port IS being upgraded due to ECRL. We don't need too many major ports there because Kuantan can be the hub for east coast, funneling cargo traffic originally bound for Singapore to Port Klang via the aforementioned ECRL, and hence to the world, meanwhile effectively bypassing Singapore altogether.

    3. Typical kangkung economics.

      How and Why would someone find it economic to offload a container at Kuantan , have it transferred to a train, and mive it by rail and transfer it to yet another ship at Port Klang ?
      They can have a 24 hour transhipment at Singapore Port , rated either No. 1 or No. 2 most efficient port in the World.

      Panama tried to sell multi-modal transhipment as an alternative to expanding the Panama Canal, and found very few takers. Mind you, the alternative route to the Panama Canal round Cape Horn is highly dangerous and takes 3-4 weeks.
      The Malay Peninsular takes 2 days maximum to sail around.

    4. They don't. Kuantan port was temporary for the transfer of goods while waiting for the rail line to connect till Kunming and hence onwards to Shenzen. Goods loaded to rail will travel down till Port Klang and henceforth to the world. The rail transport will make shipping faster than loading onto ships and then it needs to travel to Singapore.

      See why Singapore echelons are sweating now and doing everything by hook or by crook to stop this project?

  5. "One lesson from that history: When tax cuts are really too big to be sustainable, they're often followed by tax increases,"

    That's exactly what I replied to CK. Apparently he thinks he's smarter than them economists despite failing at school level Maths. Wakakaka....

    1. "One lesson from that history: When tax cuts are really too big to be sustainable, they're often followed by tax increases,"

      That's known as conventional, not thinking out of the box.

      Thus, economy failures repeat ad nauseam bcoz Kauxai economists take the path commonly traveled. Hp6 copiers imitate & blur-sotongs swallow wholesome as gospel!

      When tax cuts r really too big to be sustainable, WHY don't u look at the sustainable portion - what needs to be maintained & what needs to be cut away!

      Instead, morons r trained to sustain the humangous wastage by looking at increments of tax to continue that wastage!

      Wakakakaka, wrt my math proficiency, I did my Higher Mathematics when u probsbly still trying to understand quadratic equation.

      Bcoz of my work, I can do spectrum analysis while u still thinking about rainbow!

      Don't play2 lah.

      Playing forex black hole won't even make u a QM beginner.

      BTW did FBH teaches u about the effect of quantum entanglement on same currency at two different locations?

      When u finally cone to know this effect, u probably has no underpants to wear le!

    2. Spectrum analysis? I did that in my Diploma dude. Nothing to shout about. Try modelling AI.

      Sustainability means having a balance of both TYPE of taxes. By cutting out one TYPE, as you advocated in previous article, you need to raise the OTHER as mentioned by Mr Wessel.

      Your idealism of NO GST/SST and LOW income taxes is bullshit that even kindergarten students can tell you. Hence my suspicion that you miserably failed in Maths. Wakakaka!

    3. Spectrum analysis in diploma course!

      Wa lau-eh, memang hebat that diploma course. U sure u r not drawing rainbow ke? Definitely a 野鸡!Quite, go Google what's spectrum analysis.

      But then how could a 野鸡 business diploma holder understands telecommunication bandwidth distribution calculations le!

      U give bodoh sombong a truly new meaning. Wakakaka, Bravo!!

      Thus far, yr farts clearly shows u don't even understand supply/demand concepts of economic theory & yet u want to talk about taxation!

      Wakakakaka…… no wonder bolihland is going to the dog (haram lah, moron).

      Spending B40 allocations to incubate know-nothing M40 like u! And then continue leeching the B40 for yr useless & opulent living.

      U must keep chanting "tak akan melayu hilang di dunia" in yr dream before that echo fades completely.

    4. Yup. Sorry to burst your bubble when you thought your spectrum analysis "kungfu" was something to shout about.

      Neural-Control Interface study is a lot more complex than that and to convert it into a AI model is yet another level of complexity. From where I stand, what you achieved is not even kindergarten level.

    5. 死鸡撑饭盖, memang malu le!

      1st maths then twist to AI & now bull about neural-control!

      Wakakakaka…… a typical sign of knowing thing, trying hard to cover his deficiency!

      Sai hei for a know-nothing!

    6. Hahaha! You don't know jack about the mathematical complexities of turning neural signals into an AI model that can mimic that person. That's why I said, your understanding level of Maths is near primitive compared to moi.

      Front my point of view, what you know is nothing!

    7. John......can you help me to apply 5 why analysis? You should know right?


      Then follow by capa....after that you can submit your kaizen.....hahahaha

    8. Why yes. But before going into 5Why, you should define the issue via Fishbone diagram, otherwise your 5Why is going in the wrong direction.

      Kaizen is optional if there's further room for improvement, otherwise capa is sufficient and you can move onto the next case.

      In NCI, continuous improvements are made by collating more variable brain patterns from different persons, and once a consistent pattern is formed the AI can learn to mimic these function and actually predict with a good degree of of accuracy what the subject is thinking to do before he has moved. Basically the AI model would think and behave much as the subject would, given the same scenario.

    9. Wakakakaka……

      U r the epitome of cut&paste theoretical papers.

      Is that how u won yr diploma?

    10. Well, neuroscience is still quite infant but breakthrus are being made constantly, and the future applications is vast and revolutionary. I do appreciate your acknowledgement that what we do is so much more advance than your proud spectrum analysis. I thank you for that.

      Now go back to kindergarten and finish your Maths syllabus.

    11. 死鸡撑饭盖, memang malu le!

      Thank you for what?


      Mimpi ke?

      语无伦次 Rambling in yr incoherent statement!


      AI, neuroscience r not my field of interest. So nothing wrong if I know nothing about them.

      Unlike some moron, thinking he could show off by just name dropping!

    12. "not my field of interest". How can you call yourself a technical person and somemore so proud of your spectrum analysis kungfu, when you're not interested in the vast technical fields? A truly technical loving person will be widely read and be interested in all fields of technology and science.

      You sounded like a person who got into the technical field out of parental pressure and stayed in it because you needed the salary money. Such disinterest is a dis-service to the technical community and you should be ashamed about your lack of interest in other fields of technology. I mean, not everyone can be an in-depth expert, but at least have some idea of what they are about.

      Nothing wrong? There's everything wrong about your way of thinking as a technical person.

  6. One of the most blatant conventional Economic Establishment's Fake News in support of GST was that prices for many goods would come DOWN after GST.

    I asked one of the enthusiastic GST kangkung economist supporters the other day to name ONE item where prices came down after April 1 2015.

    He pretended to be busy attending to another question.
    The fact is there aren't any such goods, not in Malaysia anyway.