**Edited**

Above are true (except maybe for the BILLIONS every year part) and you no need to tell me. My post on rich chinese contributing to schools was merely was to point out that the poor do progress and benefit from the rich and they eventually with education can also be rich that's all.

Anyway, I just edited, actually deleted a statement from this post because I did not want to go into detail of race and politics. But after thinking about it for like 2 seconds decided to add to your above post as follows: If inheritance tax which is supposed to be "a progressive tax" as defined by wankongyew, then in this country the so called objective of "progressive tax" will never work. In actual fact the so called inheritance tax which equates to progressive tax (definition according to wanyongkew) in this country will be benefiting a single race more and eventually will own everything. Like I said, economists theories are based on assumptions and are simply a thought or idea and like a lie, if said over time to many people, some people may actually believe it to be true.

wankongyew, I also have to add that yes economics have practical use in real world and nowadays many economists in the west use mathematical models and simulations (these economists have some background in science and advance calculus) based on actual data and not assumptions/ thoughts/ideas. I was referring to the two words put together to make a definition which has no real world meaning, like I said read carefully the words I use.

This post has been edited by Gen-X: Jul 15 2010, 12:18 AM

Once again, this is a political issue dealing with the specifics of the current government of Malaysia. The subject of the thread should be about inheritance taxes only, divorced from speculation about whether or not the funds earned from the tax will be put to good use. I'm not going to reply to this or any further statements that tries to tie the subject of inheritances taxes together with the perceived evilness of the government, nor about which race will benefit from the taxes.

I said "mathematically precise definition". I did not in any way refer to mathematical models. In my own words, I also defined a progressive tax as one in which the rich would have to pay more, not only as an absolute sum, but as a proportion of their income and wealth, compared to the poor. This is now the third time that I have posted this definition.

But if you prefer, the following is the definition from Wikipedia:

As for the progressivity of inheritance taxes, there is a wealth of papers on the subject. For example, the following articles talk about the various taxes in effect in the US and their relative progressivity:

From this paper, for example, I quote:

Similarly, from this website, I quote:

I also think that it is odd that charity is used as an argument against inheritance taxes. If anything, the most charitable donors are the ones most in favor of them, for example, from this news article:

But I guess the problem is that in Malaysia everyone wants to talk only about how evil the BN government is, which is not interesting to me because there is nothing new to be found there. But no one wants to talk about policy implementation details which are interesting to me. For example, what do you think the inheritance tax rate should be? What do you think the exemption amount should be? Would you be happier with an inheritance tax instead of the GST? What about lower income tax rates in exchange for a GST? Apart from making it known that I support inheritance taxes, these are the sorts of questions I was originally most interested in talking about. But then I didn't start this thread anyway.

This post has been edited by wankongyew: Jul 15 2010, 11:02 AM

perhaps estate less than 1 million should exempted and whereas 1 mil and above should be taxed at a progressive rate starting from 5 percent?

btw, i believe we should have all kind of tax but the rate should be reduced to a level that is just enough for our national budget. a more comprehensive tax system encompassing all kind of tax will reduce the possibility of any one person able to evade taxes.

wankongyew: whatever you posted above in trying to justify your support on the the definition of "progressive tax" just reconfirmed what I said in my earlier post, Economists are just people who publish papers(articles included) that do not benefit the human race in general and Economists are not scientist

Once again I would like to repeat here, whatever tax you call it, it is still tax and we have no control as to how the tax collected is spent.

In respect to Inheritance (Estate) Tax rate, boy what have you been reading? I have given you a few examples on how it can be avoided here in Malaysia and since there is no Gift Tax here it makes the imposition of Inheritance Tax by itself will not meet its objective.

You've missed my previous question. Can inheritance tax replace GST especially in the context of Malaysia? When I say Malaysian context, I'm not implying on our political situation, rather it's the economy I'm talking about.

Again, I'm surprised with your proposal to lower tax rates for GST. (Btw, we already have sales and service tax which is equvialent to GST but has a smaller scope) You will have to lower tax rates significantly in order to match tax rates from GST. One is based on your income, the other is on the gross amount on your consumption.

Consumption tax contribute significantly to the government's revenue and cannot be removed or the results could be devastating. In fact, the government's all around the world will only try to find means to increase it.

Most govt's are operating in a deficit to finance the economy one way or the other and this is actually a form of tax. All stimulus package is unlikely to bring everlasting effect due to the nature of the monetary system and eventually, budget deficit will lead to increased in borrowings which will lead to inflation (yeah, stock and property could go out as well which people view it as a good thing but didn't realise that their buying power is actually lowered) and default will be inevitable. All of this are also taxes which people don't see.

From my point of view, your solution are not very practical.

This post has been edited by legiwei: Jul 15 2010, 08:52 PM

although i'm not someone from the economic background,i find ur comment high offensive... fi their papers do not benefit the human population, would ppl pay so much attention to it.. are u saying you are among the smartest people and those people in every government are idiots. how arrogant!!

and for god sake, no one said economist are scientist ..economics are social science and it's different from science... certain people even classified economics as art..

btw... u think u can believe science...do u know science are also sometimes inaccurate.. what has been all time truth are suddenly destroyed with new experiments very day..

Knight_2008, I apologize to you if I have offended you but my post was in reply to wankongyew's quote relating to Economists, Inheritance Tax and definition of "Progressive Tax".

However I must say that what I said is a fact in regards to benefiting the human race i.e. a Scientist's work can be applied to any part of this world (if the right resources are there) whereas an Economists' work may and only apply to a certain region (and therefore not benefiting the human race in general). And if I am not mistaken, you mentioned something like the study of economics is related to study of human behaviour (which changes with time and human actions are unpredictable) whereas Science does not.

And you are right too that scientists' works are also destroying the earth, but am I willing to give up driving my car, posting here, give up all my electrical gadgets.etc etc...... I think No.

This post has been edited by Gen-X: Jul 15 2010, 09:37 PM

i don mean scientist work is destroying the world, it's human which misuse their work..but it's just that science is not definite too... just like decades ago , we learn that light move in form of wave and suddenly now they found out it isn't...so we can't say something is useless just because it's not definite.. when a branch of study is new, that will be the problem..

furthermore, economics is basically the study of how resources are applied to maximize human happiness in this world...basically, it learns about how human divide the world resources, who gets to enjoy how much of it and how to allocate it to its most productive use...

and believe me when i say economics complement science..economist all over the world understand that world resources is finite and human population is growing...so the only way will though the progress of science and technology that we can maximise the usage of each unit of resources..

through study of economics, capital market are created and manipulated with the creation of suitable environment and this leads to investment in various enterprise which in turn funds scientific research in order to benefit human race,.

wankongyew,

<<Once again, this is a political issue dealing with the specifics of the current government of Malaysia.>>

We are talking about INHERITANCE TAX in Malaysia. So, it has to be DISCUSSED and DEBATED in the context of Malaysia,.

<<But no one wants to talk about policy implementation details which are interesting to me.>>

Which are IRRELEVANT unless and until we have a government that can implement any policy effectively.

What is the POINT talking about stuff that CANNOT be IMPLEMENTED??

Dreamer

Actually, the current "economic model" that is adopted assumed that resources in the world is infinite and thus we could have limitless growth. If you notice, the goal of every corporation and every country for that matter, is to grow, regardless of the size that they have achieved and even if it is at expense of the people. They do not care if the growth is beneficial, so long the figures add up.

I will also have to say that because of money, it has actually slow our progress down. Most of the significant discovery that has benefited us today is contribution from the past, there hasn't been anything significant to date. We are still using combustion engine powered by oil. If say there is a new discovery that could use water to run the engines or say anti levitation technology, this will be a great threat to all the O&G companies that has invested greatly and generating billions in revenue and will do everything in their minds to stop it.

The truth is that the economic model that we utlise today is really IMO to enslave us into a monetary world. How many of the people out there are actually doing a job that is truly beneficial or contribute to the society. Heck, most of the people in this world are probably involved with administrative work which in effect is quite useless and they probably hate it too, doing it just to make money so that they can get enough to eat, or buy whatever that they want. How many people actually really use their brain or involved in activities that could actually contribute progress.

This post has been edited by legiwei: Jul 16 2010, 01:16 AM

The problem with this approach is that it stifles all debate. Let's take public transport for example. This is another cause that is dear to my heart. I would like to have a comprehensive, well-integrated public transport system in the Klang Valley. I would like such a system to be subsidized as I do not believe that usage fees for public transport alone will cover the cost of the infrastructure and operation. On the other hand, do I trust the current government to implement such a system? I don't think so, given how much investment would be required and how likely the government is to hand these contracts to crony corporations and how prone they are to appoint key managers according to political closeness and familial relationships instead of competence.

But does this mean that I cannot discuss public transport systems at all? Can't we at least talk about an objective to aspire towards, to understand what each of us expects out of the transport network and how it should be paid for? We all know there is little hope of getting it implemented, but surely we can see still talk about what we would like a future government that we do trust to do?

i assure you that the current economic model is not as such...if not we wouldn't have the conference in copahagen.. nevertheless, i admit there are certain political forces at work that distrupt the implementation of effective economic policies...there are many stakeholders involved and certain stakeholders with more influence will be able to affect the policies to their advantage..

btw, you are correct in that most of what we enjoying are from last generation..but this will the same for our children where what they enjoy will be fruits of our generation discovery..and do u know how much petrol have evolved throughout the century...even for diesel they have started to use 4m in europe which are even more effective and caused less pollution den regular petrol.//

and do u mean IMF? if so, please do not blame IMF..if not for the country's own financial management problem, IMF will not have a chance to interfere..

and let me tell u something important money...one of its main function is storage of value...in ancient times during barter society..there is very little avenue for trade as perishables cannot be brought to far land...as such everyone produce just enough which is less than what they could have produce..this leads to under-utilisation of capacity.. as such when bad harvest comes, there is no ready stock nor they have anything to trade for food.. thus famine results..

with the advent of monetary system, man produce more, of which they could sell and gain money..this money they can store and trade stuff in the future when times are bad... furthermore, as money can last very long, it can be carried to far away land and thus effectively u can trade food which will perish in3 days locally and go to distant land to purchase goods and come back..

those elders who created money system meant it for the good of mankind..it's just that certain people abuse the system in order to live off others..

and about admin work...what do u meant? u mean clerical, accounting?? without this system, the current system will not be effective..support system important in the sense they complement the production system..

You are smart person who is interested in world affairs...our world needs more people like you....however, you should ensure you have adequate knowledge so as not to be misled by certain fanatics and interested quarters.. if u are interested in economics and how the system works, you can get a brief idea from economics for dummies..it should be an eye opener for you

And to add something about inheritance taxes, here's a fun fact regarding the estate tax in the US. Due to a quirk in the tax laws passed by George Bush Jr., there is no estate tax for 2010. However, the tax will come back in 2011 with both a lower exemption threshold and a higher rate.

The result: pundits are predicting that a lot of Americans will kill their parents in 2010.

The primary objective of every corporation on earth is to increase shareholders wealth. If you read interview, statement or press release by the Companies, CEO or any representative, it will normally go along the lines of growth and then go on to talk about how they will achieve this. If you look from a country's economy perspective, it is normally about GDP. At present, we have a very serious environmental threat which is in direct conflict with the economy. Under normal circumstances where there is such a perceived threat, (that could potentially kill most of the people in the entire planet), all efforts will have been made to resolve such a threat. However, there isn't exactly much goin on except of a growing awareness about it from the coverage of the media. What I'm trying to say is that economic powers will always prevail even in life threathening situation. Business is still at usual with more development the better regardless of the consequences. The economic model is as such in order not to lose out, one will have to "develop/grow", regardless if it's beneficial or not. It is a very selfish model and designed to suit people that has greed in mind.

To me, that is not exactly the stuff in which I call discovery. Most discovery in the modern age is to be more efficient. It sort of improvise existing ideas to make it better but nonetheless the principles remain the same. We are still unable to develop an alternative energy source from oil and we are running out of time. With our current level of technological advancement, I'm confident to say that such a technology could have exist but are not developed further due to the system in place which is a thread to big money. As I've mentioned, due to the current monetary system in place, it has stiffle development/progress more than to contribute it. All research requires funding and corporation will only do so if it's in their interest. They will even go the an extent to fund research to falsely promote that their products is good. Pharmaceutical industry is a very good example.

I am not talking about IMF but the monetary system, a system to enslave us into material persuit. In any case, all monetary system that adopts a central bank that controls the money supply and charges interest couple with fractional banking system that also charges interest is bound to fail regardless of how well it is managed. The reason is simple, it is mathematically impossible to sustain such a system. Also, talking about country's financial management problem, what do you have to say about US?

If you say the function of money is to store value, and is how our monetary system works, that is certainly not true. The piece of money is only a piece of paper which has no value except for a promise of payment. It will only continue to be of value where people have confidence in it and believe that a RM5 will be able to buy them say a bowl of noodles. But in effect, it has no value in itself, not backed by any commodity or gold which was the case in the past. Money in itself is not a consideration but were made to be believed so. Fiat money is actually debt, where currency in issue is very much correlated to the debt of the country.

In any case, paper money represents very little of the total money in circulation in the entire world, most of the it will only appear as figures in computers.

There are actually better models than the current one but the question is will the people be willing to change for it? But I guess I could have answered this question myself, big no.


Precisely, we have alot of jobs created merely in order to sustain the system in which itself is corrupted. Jobs that do not add value and is a means to survive. They probably do not enjoy it. How many people actually gave up their dream in order to persue something that has more economic value. Can you imagine a nation that do not use money? Of course that is a far fetched idea and not feasible but I will leave it as it is. And no, when I say don't use money, I'm not recommending us to go back into the days of barter trade either.

But there are other monetary system that still uses money but are at least sustainable but will still require a significant change.

Interestingly, very often ideas that are contrary to mainstream knowledge will be riducled and the people labelled as fanatics. Btw, a big majority of my post about about the unsustainability of the current monetary system is not just merely an opinion of my own but by economist too.

This post has been edited by legiwei: Jul 16 2010, 10:39 PM

have u ever heard of adam smith's invisible hand theory. it states that when everyone pursue his or her own objectives, this will result in maximum happiness in everyone. An often-quoted passage from The Wealth of Nations is: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

however, this is subject to conditions such as there must a strong legislation where property rights is respected and government intervene whenever market imperfection arises.. for example to due with pollution, imagine the air is own everyone whereby the trustee would be the government...as such, in order to pollute the air, we have to pay a cost...as such all price of goods will include the pollution cost and the higher price in itself will drive down demand lessening pollution...all production causes pollution and as such, only goods that are really needed will be produced..the problem with society is that everyone can pollute for free and the cost of pollution is not included in the cost of goods due to weak legislation which in turn leads to high demand which cause unnecessary pollution..



let me ask u question, would a businessman wants to fund a research to discover new energy source... i believe as most reasonable man will that he will.. the discovery of new energy source will make some1 extremely rich..as such, though it will benefit the businessman will benefit,but the society will still benefit as a whole..nevertheless, heard of something called antimatter...this technology is being developed as we speak and is said to be one of new sparkle of hope...one of the research centre at the forefront of such development is CERN which is essentially funded my many big corporations..the experiment itself requires a tunnel which is more than 16 miles in length to be developed and who funded this if not for corporations.. while i am not so naive as to suggest they do it for society, but it is precisely the monetary system which will give them opportunity to wealthy when technology are discovered that encourage such development which will benefit humankind as whole..



money is never equivalent to wealth...it's merely a vote... a vote whereby we human possess which we will cast it in order to direct which resources are to be used to produce what..which means a currency is only as valuable as the goods it can buy...monetary system only starts to go havoc when it is printed recklessly..

and to say gold is a perfect system might not be true..it has some cons as well which will too difficult to explain here...however, i draw ur attention to this quote from Warren Buffet, "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head"



though support job which do not seem to add value, it is very useful....look at this when 10 person produce each 100 units the amount of goods produced will be 1000...with 1 of the 10 doing supporting such coordinating resources, they 9 ppl productivity will increase and if each produces 140 units as result, the total would be 1260 units..wouldn't society benefit as a whole with more abundant goods but produced using same of human capital.

and about people giving up dreams due to economic system..imagine this situation whereby everyone just pursue their own dream without regards to needs and want of society, certain profession will be in abundant when it is not needed in such amount whereas certain critical profession will not have enough people, how would the world become? furthermore, not everyone are good in certain field though they might be interested in..our imperfect economic system to a certain extent enable only those suitable for a profession to join and direct those unsuitable to their profession where their abilities are better used..

and btw, everyone is entitled to their own opinion..i'm merely saying that u should read 2 sides of the story..never concentrate on mainstream nor other sources in isolation..

Have we derived the topic of this thread?

Seems like the arguements on the later part is more on economics than inheritence and gift tax.

Right, I guess I've deviated significantly from the topic.

lol..my bad

those developed countries in the Europe that adopt inheritance tax (including other forms of taxes like council tax,poll tax) still enjoy the best quality of life in the world...despite their income being halved paying taxes
opposethat to the USA, !!!


i was glad that I had the chance to live in the UK for several years, they pay taxes with full knowing that they didnt have to worry about their healthcare, etc.....

^Out of curiousity, why didn't you stay on? I think I pretty much agree that the quality of live over there is pretty good. Further, buying power is very high, where at times you could even convert it back to RM and yet it's still cheaper.

Btw, US also has inheritance tax too.

I guess it's not really about the type of taxes that you have that determine the wealthfare of the nation.