Malaysia did have inheritance taxes not long ago when Tengku Razaleigh was FM if I am not mistaken.

I guess our government concluded that the rich manage to find a way to go about the inheritance tax and decided to abolish it. I doubt the government would reimpose inheritance tax in the future as it would only affect individuals mostly in the middle class and not the really rich people. If whichever government were to impose it, I assure you we will get a new government comes general election.

As far as Capital Gain Tax, I think our government abolished it in order to attract foreign investment/funds (eg Malaysia as Second Home, Overseas Funds like Credit Suisse Group AG, etc ) as we really need foreign funds as our economy have been going nowhere for more than a decade. Anyway if our government does imposed Capital Gain Tax on shares/mutual funds, I wonder if we working class people would be getting less dividend from EPF.

Also if the government were to reimpose Capital Gain tax for properties, rest assure the property market would be affected and thus our economy. That's why our government did a 180 degree U turn on Property Gain tax last year.

Having said the above, the "rich families" are paying some form of "inheritance & capital gain tax" in the form of income tax. Most rich families are rich not because they have tons of cash but have shares in companies (which are passed to the next generation), and these companies would be paying income tax (which include disposal off their investments/assets and the shareholders which inherited the shares would be getting less). Therefore the abolishment of capital gain tax actually benefits the not so rich hardworking wage earner individuals that are smart enough to invest in whatever they invest in.

As for GST, well I guess it would definitely affect all but the rich would be paying more taxes too as their transactions value are higher. If you ask me, the present tax system is unfair, less than 3.8% of the entire Malaysia Population pays income tax and that includes me. From my point of view, the other 96% of the population of Malaysia is enjoying my hardwork. With GST, all those individuals running illegal businesses/getting corrupt money would also be paying taxes and thus contributing to the "well being" of the country.

Asset disposal is taxable for an investment companiy. For example say a company bought a piece of land for RM100,000 50 years ago and dispose it for RM10,100,000 today, profit from the sale is 10,000,000.00 which is taxable under income tax. For companies, property gain tax does not apply.

Economists... who? To me, they are only good in publishing papers that does not contribute to the general well being of the human race. Economists are not scientists and their theories are based on assumptions. The western world have the best schools that produce so call economists and we all know those countries are going broke and guess who is to blame if not the economists.

Anyway, for your information, we did have inheritance/estate tax before but not gift tax. The example I mentioned on shares was to point out that a person who owns company shares from his/her ancestors will be "taxed" when they dispose off assets. I can easily give you another example here in Malaysia where a child can inherit a property and not being tax, i.e. dad buys land under son's name or gives son an asset or cash (1 followed by how many zeroes also can) as a gift out of love (well if one hates his child then I guess child won't be getting anything from dad).

wonkongyew, I blur lah on this progressive or regressive tax mentioned by you, both so called taxes goes to the government and we (economists included) have no control as to how they spend it.

As for capital gain, I have mentioned as to why I think our government abolish capital gain tax. Why do you think the government did so? Guess where and how does EPF dividend money comes from? Impose capital tax and you would see foreign funds disappearing and guess what will happen to our economy.

Anyway, we can talk about this tax and that tax but I think our government won't be imposing any new "taxes" for next few years in view of the political climate which is unstable. But what they will definately do is reduce subsidies and allow increase in TNB rate, Water rate and Plus rate etc etc.

Trust me, our IRB will find ways to tax a company for disposable of property/land. If a company sold a piece of land in 1999 when it was a tax free year, IRB will tax you under RGPT and after 1999 it is back to Income Tax. Can't run away from paying taxes, hahaha

Besides the rich paying higher income tax, the rich also tend to pay more taxes when they are alive than others for the same level of service. For example, the super rich tends to buy higher cc cars where they pay exorbitant tax when purchasing it and then higher road tax yearly. A 5000cc car road tax can buy Kancil. But yet their cars still have to go thru pot holes and they get stuck in traffic jams. In US, all pay the same amount for road tax and cars are not taxed like here. The rich also pay higher assessment rate for their bungalows (since their land value would be higher as they would be living in a "upper class" neighbourhood ) which in turns subsidies the cost for providing services to other areas and yet their household rubbish is also collected the same number of times a week as others. One can say this is unfair too.

In respect of your first statement - thank you for trying to educate me. But then again does the two words i.e. "progressive tax" has any real world meaning or simply two words put together by some economist? My wife understand the two words "progressive tax" as she is an economist (she claims to be one since she has a economics degree but I respect her because her's is Bachelor of Science, hahaha) whereas I couldn't care less about the so called definition of "progressive tax" as it is of no relevance to me since a richer person "usually" ends up paying more taxes than a person earning/having less no matter how you want to term the tax.

What I realised from your posting is that you make assumptions on what I posted or simply don't know how to interpret the words that I have posted. I did not in any of my post agree or oppose to any form of taxes but merely in all my posts made general comments. In actual fact, I am one of the few paying all kinds of taxes imposed by our government and daily when buying cigarettes So I guess you should thank me for providing you safety and comfort in you life. And I thank you the same if you pay income tax.

I myself do not consider myself rich and in no way did I say that I deserve better service nor against subsidies ( make me wonder now can NEP be termed as a form of subsidy?). I understand and support subsidies as without it this country would be in kayos. Please reread the words I posted. But I must say that I am grateful to the super rich (my bosses) for giving me a job so that I can enjoy life in comfort.

And as for your claim that it is morally correct for poor to get more and better service than the rich when the rich pays for the service, boy which economic school of thought is that! You might as well say that it is morally right to go rob the rich so that a poor will get more than the rich . You are supporting double standards and that's morally wrong

So how about giving us some mathematical model(s) that support your claims on inheritance tax and the so called definition on "progressive tax".

What you said is exactly correct in the first statement above and therefore why did you mention about morals when replying my quote on the subject of subsidies?

You claim you're not religious and yet you said it is morally correct to give more to one group than the other. And as far as I know, most religions advocate equality and encourage charity but never imposed on its followers to take from the rich so that the poor will have more than the rich. Therefore you may think you're an expert on economics but please refrain from commenting on religion and moral issues here.

I am personally aware of rich Chinese (of taoist faith and Christians) who contribute ( or as you term it sacrifice which is inappropriate as no mainstream religion impose on its followers to sacrifice for others ) a lot of their time and money and those who can't afford to contribute money, they contribute their time and energy to their place of worship for all to use regardless of their social standing. Therefore it is inappropriate for one to link the poor or rich or whomever to religious issues.

In every community here in Malaysia, you will find that the local Chinese businessmen contribute a lot of their wealth to schools (for the benefit of all races) and therefore the rich in this country have been and will continue to contribute to society regardless of whatever tax that may be imposed. That's true progressive action (new defination by yours truly ) by the rich that is not subjected to government misuse.

wankongyew, I do think you are smart (but too assumptious) and would like you to answer the question thrown to you earlier as to why you think our government abolished Capital Gain Tax. Are you a Malaysian in the first place?

**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

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.

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