Chapter 1 Introduction
Hong Kong has been emerging as a major financial center for the Asian-Pacific region since around 1970(Jao, 1979). However, wealth gap and income inequality is always a criticized issue. According to Hong Kong Government Fact Sheet document, Gini coefficient, which is a common figure using on the measurement of household income, increase by 0.004 from 0.533 in 2006 to 0.537 in 2011. Oxfam Hong Kong reported that in Hong Kong, the richest 10% who earn a HK$100,000 median monthly income gains nearly 29 times than the poorest 10% gain per month, while the same comparison result in 2013 is 26 times and 26.4 times in 2014. Bloomberg Billionaires Index also shows that the top 10 billionaires are now having …show more content…
Hong Kong tax base is phenomenally narrow and limited under the international standards. (Financial Services and the Treasury Bureau, 2006). As the Government tax revenue are mainly depends on Profit tax, Salary tax and Stamp Duties, which are nearly 90 percents of the total tax revenue, resulting that Government financial structure become unhealthy. (Hong Kong Inland Revenue Department, 2015). Moreover, the tax revenue is also fluctuated. Profit tax contribute around 45 percents of the total revenue collected (HKIRD,2015), is greatly influenced by the economic environment, and which shown after the financial crisis that Hong Kong tax revenue drop 4.6% in 2008-2009 and 6.5% in 2009-2010.(HKIRD,2010).
Back on 8 March, 2000, Mr, Donald Tsang Yam-kuen, who severed as Financial Secretary, fifth budget for the Finance Year 2000-2001 in Legislative Council of Hong Kong stated that it is an issue of broadening the tax base. 3 month later, HKSAR Government promulgate that a 16 members Advisory Committee on New Broad-Based Taxes Is formed, lead by Mr Moses Cheung. Mr Donald Tsang also announced that the Advisory Committee is to advise on several question, involve what types of broad-based tax may suitable for Hong Kong, and should it be introduced including a consumption-based tax. A formation of Task Force to Review the Public Finances is also announced, and is responsible to exam the details that government’s from 1998-19999 and 1999-2000 up to 2002-2003 on the tax base,
Whilst William McBride, chief economist for Tax Foundation website, sided with tax cut policy saying that to strengthen the financial state, “we should lower taxes on the earnings of capital,” “workers and the businesses that hire them,” Chye-ching Huang and Nathaniel Frentz, both are senior Tax Policy analysts, completely debunked the evidence McBride provided to support his argument, which includes the review of twenty-three among twenty-six studies he thought to advocate the idea. Indeed, as one conducts research, regardless of what sources it comes from, agreement over tax issue should never be found as a unanimous answer. One of the reasons why it is so difficult to reach a definite conclusion rests on the fact that although some statistics may show economic growth was in step with tax cut, correlation does not mean causation: just as ice-cream sale and murder rate increase during summer time, it is baseless to assume that higher ice-cream consumption leads to higher odds for crime. Moreover, because there is a great amount of research has been done on taxes, different interpretations from these data are understandable. Before concluding that “nearly every empirical study of taxes and economic growth published in a peer reviewed academic journal” finds cutting taxes improves the financial status quo, thus, people need to consider
Furthermore, when analyzing the different classes, and the distributions of wealth and income in the United Sates; for instance, the upper, middle, and lower classes – it is an astronomical amount of wealth that the top 1 percent acquire. It is also noted by Johnson & Rhodes (2015), “that income and wage inequality have risen sharply over the last thirty years” (pg. 228). Equally important to this, is how the average change in income is divided in Americas quintiles and the widening gaps. For example, in Table 5.2, while the lowest fifth quintile increased from $11,128 to $11,361 – a difference of $233.00 from years 2006 to 2012; the highest quintile increased from $289,446 to $319,918 – an exponential increase of $30,472 (pg. 229). With income inequalities at this rate, it is difficult for the majority of the United States to experience upward social mobility. Pursuing this further, in a line stated by Johnson and Rhodes (2015), “The wealthiest Americans can live on the dividends from their investments without having to touch the principle or work for a salary” (pg. 230). From this, it is visible to see how society has compartmentalized different levels of functions to keep a so called balance for the greater
The Gini coefficients of rural populations increased about 75% and the urban increased about 113% in these 30 years. Moreover, the aggregate Gini coefficient for China reached 0.4 by 2000, which imply the serious income inequality of China in general.
Throughout the years, the gap between the poor and the rich has only increased. The wage percentage has decreased, while the productivity percentage has increased. During recent years, the wealthiest of the American population, also known as the top 20%, control over 80% of the American wealth, while the “poorest of the poor” barely control 5% of the wealth. An example of this income gap would be CEO of companies and their
This fact remains accurate after government attempts at wealth redistribution such as taxes. This shows that the government is not successful at helping to redistribute wealth and the dramatic increases in wealth of the rich while the poor barely improve show the inefficacy of the “trickle-down economy” model. To figure out why the 10% is gaining wealth so quickly, the people that make up this small group must be analyzed. The top 10% is essentially comprised of three main groups: superstars, CEOs, and high-income professionals. However, the incomes of superstars and CEOs are increasing more rapidly than those of the high-income professionals (Belsie). While the incomes of high-income professionals and superstars are market driven, they do not benefit from the same rate that CEOs do.
According to the Credit Suisse Global Wealth Databook America is now the most unequal of all advanced economies (Eric Zuesse). The 185 richest families in America are worth 1.2 trillion dollars combined (Dolan and Kroll). Additionally, the 400 richest Americans have more wealth between them than the bottom 185 million (Social Problems 33). Now it is often thought that the one percent in America controls one-third of the nation’s wealth. The sad reality is that the Americans in the top one percent actually control 35.6 percent of the wealth which is more than one-third of the nation’s wealth. What’s even sadder is that the top ten percent of America controls over seventy five percent of the total wealth (Dave Roos). What this means is that the remaining twenty five percent of the nation’s wealth is distributed among ninety percent of the United States population. There are approximately 321 million people in the United States, and approximately 289 million of them are only responsible for twenty five percent of all the nation’s wealth (United States Census Bureau). The inequality gap has increased for a number of reasons. For
No country in this globe can escape from wealth inequality. Never and ever. Even, America – The land of opportunity and the first economy of the world. While the nation is striving towards achieving its dream, it is faced with the problem of wealth gap among the low, middle, and upper classes of the society. Wealth inequality is a phenomenon or a social event of the difference in money and other assets which individuals can accumulate. For some people, no more land of opportunity and the existing wealth gap is a result of unequal opportunity. However, I and others argue the nation is still a land of opportunity, but with some challenges to overcome. Furthermore, I and some firmly believe that the wealthiest people at the top are the achievers
Managing assessment safe houses and different strategies utilized by rich people and expansive organizations to evade duty is significant; the measure of cash lost by creating nations to expense safe houses surpasses all universal advancement aid. This increments worldwide imbalance as well as implies that a higher extent of open consumption must be financed by citizens in lower pay bunches. In numerous nations tax assessment, has stopped to be fundamentally
Ever since the Great depression of 1930’s, the Fed has been trying to adopt a mix of fiscal and monetary policy to combat the various issues cropped up. Starting 1930’s, expansionary fiscal policy was adopted by increasing government spending, however the source of revenue came largely from higher income tax rates. However, over the years, various exemptions have been made in income tax systems. Although, the Tax Reform Act replaced the previous law’s 15 tax brackets which had a top tax rate of 50 percent, with a system that had only two tax brackets – 15 percent and 28 percent.
Also income is less concentrated than wealth. Also the Federal Reserve’s Survey of Consumer Finances (SCF) is the main source to obtain information related the allocation of wealth for household. The SCF income distribution received approximately a third of all income in 2013 data also shows that the top 3 percent of the, while the top 3 percent of the wealth distribution held 54 percent of all wealth (Stone, et al). Similarly, the top 10 percent of the income distribution received a little less than half of all income, while the top 10 percent of the wealth distribution held three-quarters of all wealth. In fact, the average wealth has amplified over the past 50 years, but it has not developed equally for all groups
“Income inequality in the United States has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend” (Lowrey). Economic inequality has sparked many voices, some which have even been grappled in literature. This issue is not only effecting the people who face these barriers, but as well as the United State’s financial system, which has made economic expansion difficult to accomplish. By executing simple actions, the imbalanced gap can be narrowed. Such actions include raising the minimum wage or increasing taxes on the wealthy.
With every passing moment, the problem gets worse, and many people in this country do not even know it exists. Over the past few decades, the middle class has slowly begun to disappear as trillions of dollars have shifted to the top 1% of the country. This pandemic so infiltrated the American economy that the richest 400 individuals in America today own more wealth than the poorest 150 million people, more than half the country’s population. Despite a thriving GDP, the wages of workers have stagnated, and, simultaneously, the economy has grown so top-heavy that it is at risk of capsizing. Ever since the 1970s, the gap
Taxation surrounds us in the world. Individuals fear tax, and a majority of the items we use and need are taxed. Even on topics such as Celebrities and the Olympics, taxation manages to find its way to still come up.
During the last several years America witnessed a scenario in which the volume of the rich is drastically increasing. This happened at the cost of a breakdown in the volume of middle-class and an increase in the volume of the poor. The most commonly used tool for measuring social inequality is the Gini coefficient. This is a scientific approach to finding the spread of wealth in a given geography. If the Gini coefficient is zero, it is a clear signal of perfect equality. If the Gini coefficient is one, it shows that the wealth in that area is not properly distributed. Studies show that America has much to improve in terms of Gini coefficient.
“The richest 1% of adults in the world own 40% of the planet's wealth, according to the largest study yet of wealth distribution. The report also finds that those in financial services and the internet sectors predominate among the super