If there were a book called Hong Kong Pressure Groups You’ve Never Heard Of, Left 21 would probably appear around halfway through, on page 791. Between Left 20 and Left 22, perhaps. Anyway, these people and their buddies from the Neighbourhood and Workers’ Service Centre (page 633 of Hong Kong Pressure Groups You’d Heard Of But Forgotten Existed) have called for a tax on dividends to help the poor.
They describe it as a tax on tycoons, but it would affect anyone with a stock portfolio, including helpless retirees who depend on dividend income to survive. And, now I come to think of it, me. (There is a way round that, namely to expand the current salaries tax into a broad levy on all forms of income above a given living allowance – but even Left 21 aren’t suggesting we go down that road.)
Obviously, this is more about getting media attention than proposing a sensible policy; this way, Left 21 can mention property mogul and famed non-payer of tax Li Ka-shing, and thus get into the papers. The suggestion is silly because it assumes that the government needs additional revenues in order to increase expenditure on the poor. With a grossly overpaid civil service, regular budget surpluses and some HK$1.6 trillion in reserves, Hong Kong could double welfare spending without even noticing the impact on its pocket.
The Standard quotes a number of individuals, all of whom come across as buffoons – with one exception: a legislator from the pro-Beijing Democratic Alliance for the Betterment Etc of HK, who calmly points out the government’s enviable fiscal position. I can’t help noticing this, as it’s the second occasion recently (or ever?) that DAB members have unwittingly sounded like they’re thinking for themselves.
The other case has been that of American geek-spy-traitor-hero Edward Snowden, about whom DAB vice-chairman Starry Lee says “I think the Hong Kong government should protect him.”
We must stress ‘sounded like’. Of course, Starry is not really speaking her own mind. The Global Times, almost in a parody of its own usual chutzpah, is calling for the Big Lychee to give refuge to Snowden on the grounds that we shelter Chinese dissidents. Although Beijing is officially silent on Snowden’s fate (and milking the we-are-victims-of-US-cybercrime thing for all it’s worth), it seems that China likes the idea of making the US sweat over the possibility that the 29-year-old school dropout whose mind holds the key to the US’s entire national security won’t be returned.
Everyone seems a bit confused. Some Hong Kong pro-Beijing voices are trying to say that the pro-democrats are American stooges for not criticizing Washington’s electronic surveillance enough. Other patriots, like Starry, find themselves protesting awkwardly with their local radical enemies outside the US Consulate. Over in the US, some conservatives who usually denounce Barack Obama as the Kenyan Socialist Muslim are siding with him, while some are joining progressives in opposing his attack on privacy, and some other progressives are miffed that Snowden is defecting to and passing secrets to Communist China (one or two here, at least). Compared with this lot, Left 21 thinks straight.
The allegation that Snowden is passing secrets to China adds a fascinating twist to all this. China would want to refute it as beneath the nation’s dignity, while Snowden has to disprove the slander to protect his status as saintly hero. It’s the sort of thing that can induce everyone to play along with an extradition. Meanwhile Ed is working on his wispy-beard-and-whereabouts-unknown mystique (except of course for those of us invited to the barbecue on Saturday).
Socialists are so confusing aren’t they? But it does give people the jitters, doesn’t it. And that’s why it’s worthwhile suggesting things.
Meanwhile, in Causeway Bay, the hoarding has returned to the SCMP headquarters, thrusting the poor journalists once more into doom and gloom. The hoarding shows a man with a pain in the neck. Strange that.
I will be bringing a live sheep to the barbecue. And a bit of dog hotpot for you.
By policy, effectively Hong Kong already taxes dividends by imposing a tax @ 16.5% on company profits which is 10% more than the standard rate of 15% on employment income
Its going to be fun watching China take the moral high ground on spying on residents. Simply visit Shenzhen to see which favourite websites can’t be accessed simply by moving a few metres over a grimy river.
OT, and not want ting to de-rail the thread, I was amazed by this in today’s standard; “Lawmaker Kenneth Chan Ka-lok said his four daughters studying at ESF schools will not be affected, but the fees will be unaffordable if he sends his one-year-old son to one”.
WTF is he doing sending his kids to the ESF in the first place let alone bleating that the school fees will be ‘unaffordable’? On what basis are a local lawmaker’s children native speakers of English? Surely this is why the ESF has problems in students who have few other choices being turned away. Funny how a love of HK and its institutions never extends as far as sending one’s own children to a local school. The chutzpah is amazing.
The China-for-the-Chinese uber patriots, and their lapdogs, some in sheep’s clothing, like Jodper and Stary, hate Hong Kong and all it stands for. They do their urmost to bring it down to the only level they can understand.
So when they start admitting its existence, and even referring to its “independence” (the word is okay, it was in yesterday’s SCUMP) of thought and even of action, you begin to smell a fish, or even think it’s all a bit rat-like.
Stary is trying on a stateswoman-like mantle for size. And it’s clearly a subtle provocation to China’s enemies. However, that covers the whole of humanity (moon the next stop), so one can legitimately feel confused.
Hemlock, if you encourage Mr Dr Blow, you’ll just make him worse.
Hang on. The DAB’s backed by tycoons. Why on earth would they advocate a policy that disadvantages themselves? Unless it is a cunning plan or subtle ruse to, er..
It’s all too Machiavellian.
I believe there are more than a few cancellations to “The BBQ” on Saturday as it clashes with the rugby, general wariness of the whole Eddie Snowden saga and the quality of Vines sandwiches.
However those of you that trudge over to Sai Kung can you ask Eddie if the NSA bugged the Chinese Central Liaison Office recently? If he did what’s their bottom line on the Chief Executive Election in 2017? I have been asked by firm to write some contingency plans should Central get occupied and I’m wondering, like China, if I should take it seriously?
“Democratic Alliance for the Betterment and Progress of Hong Kong lawmaker Chan Kam-lam said it is unnecessary to introduce such taxes as the government has sufficient fiscal revenues to resolve the poverty problem.”
Agree.
“Taxation Institute of Hong Kong vice president Ng Kwok-yin also struck a cautious note. He said businesses, in a worst-case scenario, might reduce the amount of dividend allocated to directors or shareholders to avoid a tax.”
As @The Regulator has pointed out, dividends are already taxed at a higher rate than salaries. Li Ka Shing could pay himself a salary consisting of his companies’ entire profits, and thus save 1.5% tax. Minor shareholders would no doubt be delighted that the resultant gain is share price from the overall tax saving will more than compensate for the loss of their dividends.
Maybe Left 21 are on to something….
@Stephen. FFS. Central is clogged up at the best of times. A few hippy types sitting around singing “We shall overcome” and ” Kumbaya, my Lord” will hardly make a difference. Those of us with long memories will remember the taxi strike of 1984, when travel around the city was quicker. If you need a contingency plan … Leave home a bit earlier and take the MTR. Done.
Correct me if I’m wrong, but isn’t HK the only developed economy without dividend tax?
And we wonder why we have one of the biggest wealth gaps?
The Left 21 proposal is designed specifically to address that. That’s the first paragraph in the Standard story. Fair enough.
Hemlock’s helpless retirees would simply pay at a level that’s the same as the salaries tax that everyone else pays.
It’s pointless to argue that the Government already has enough money already. If it got revenue in a more equitable way that captured real income realistically, it could lessen its reliance on land premium. Job done.
Are there people out there who really think that giving the government more money, from whatever source, is a solution to anything? If yes, please pass the bong.
There is a massive sit-in in Central every Sunday. Not just a few thousand hippies, Lamma-heads, NET-teachers-that-could-use-a-little-tan and wide-eyed, naive uni students, but a hundred thousand or so l’il brown sistahs, sitting around, dancing, preening and eating adobe. And that never brought Central to a stand still. What are we exactly worrying about ? Or rather, you.
@PCC
The point is not ‘giving the government more money’, it’s where you get the money from.
More from those who are not paying their share (like Hemlock) means less indirect taxation of those who are now being squeezed (like everyone else).
Little brown sisstas eating adobo is one thing…but some of them are into baluts…and…horror…Christian Music.
Clear out Central…on Sundays. They’re opening up Lantau to Mainland Undead…why not bus the sisstas there too.
Dear Aghast,
Taxation is not about revenge on the middle classes. Or is it? Hell if I know…
Anyway, the real problem is too much home ownership (http://www.piie.com/publications/wp/wp13-3.pdf). That probably also means that more public housing means more poverty. And of course, we pay for public housing with… taxes. Causal relationship, anyone?