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Hong Kong Is Doomed! Foolishly Lowers, Eliminates Taxes To Stimulate Economy
Submitted by Simon Black via Sovereign Man blog,
The government committee was clear—if nothing was to be done, the government’s finances would be doomed in as little as seven years.
The Finance Secretary had some tough decisions to make. Raising more revenue for the government over the next few years is crucial.
He was also being targeted and mocked because his ministry’s predictions for economic performance and taxes raised have been consistently wrong every year since 2007.
This is common for government agencies in pretty much every country, but Hong Kong is possibly the worst—they continually underestimate the numbers.
The government will finish the fiscal year ending next month, for example, with a surplus of at least HK$60 billion (probably more, given how horrible they are at forecasting), which is six times more than the finance ministry projected.
A surplus! Who does that anymore??
Couldn’t they find something else to spend money on? Armored vehicles and combat gear for the police (they did face a massive uprising just a few months ago after all)? Welfare? Crony subsidies? Drones? New government committees and agencies? Surveillance?
At least build a bridge, dammit! What are you going to do with all that extra money now??
I’ll tell you what they’re going to do. The Hong Kong government is so foolish that they’ll… I’m utterly disgusted saying this… they’ll -gulp- give it back to the people…
They’ll institute measures like a salary tax rebate of about HK$10,000, a waiver on property rates, and a PERMANENT increase in the tax allowance for parents from HK$70,000 to HK$80,000 per child—which is a second increase in child tax allowance in three years already!
One of the officials said: “There is a need to stimulate the city’s domestic consumption by introducing measures to leave more cash in the hands of the public.”
What are you talking about, man? Everyone knows that you stimulate the economy by increasing government spending, not reducing it and just leaving the people to decide what they’re going to spend it on. It’s insane.
Reducing already low taxes because you’re running budget surpluses? And you’re only taxing people and companies on the money they earn within Hong Kong? Really? You’ve got much to learn…
Even though following this practice has transformed the once barren island at the mouth of the Pearl River Delta into a global financial and trading center with one of the highest standards of living in the world, this clearly unsustainable bubble of a free market economy, minimal government, and fiscal prudence is bound to end in disaster.
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Finally, someone GETS it......
Hilarious article!
I think HK knows that the days of “one country, two systems” are numbered, and they are basically giving the finger to Beijing – they figure let the HK citizens save up as much as possible to flee/survive the coming confiscation.
HK named to the Axis of Evil in 3... 2... 1...
Hong Kong is doomed, long live Hong Kong.
There is no need for tax when you can simply print money to fund the goverment.
Conversely, there is no need for banks when you can simply print money to fund economic activity.
Flashback: how did the American Colonies fund themselves? They printed money.
Lowered taxes?
LOWERED taxes???
OH MY GODDDD!!!!!
As a staunch liberal, I am DEVASTATED!
DEVASTATED!!!
This might be a ploy by China to undermine Western governments that are far less able to do the same. An opening move to leverage productivity against the noxious fiat vapors of the West's Central Banks .
Success in the future is going to go to those countries that abandon current failed government actions.
A government that shoots its economy in the foot will likely do better than one that shoots its economy in the head.
Hong Kong does not print money - it has a currency board peg to the US dollar. Money supply can only increase if HK exports more and earns more USD. No free money.
Sheesh everyone knows the government knows best how to spend you're money. It's a formula all economists learn in kindergarten, you take some of your childrens prosperty, lowering the standard of living they might have had in the future, so you don't have to lower your standard of living now.
Nah, Hong Kong is too small to be noticed. Story will be just ignored. Now back to our usual higher taxes are good for the economy show by Paul Krugman and the asshats from the EU.
Anyone know how the Hong Kong model compares to the Iceland model?
The current chief executive of HK, Leung Chun-ying, who has executed this policy is actually a Beijing loyalist. Although born in HK he is widely believed to have built his political career on membership of the underground communist party. If you have been following the US State Dept sponsored protests, he is hated by the so-called pro-democracy movement and you will see his image with fangs in the crowds.
The whole thing is odd. Apprarently the protests are about their right to choose a chief executive who has not sworn allegiance to China and yet nobody has any answers to the fact that every country in the world requires its lawmakers/chief executive/president/PM to swear allegiance to the nation. It's moronic. Next time you watch an interview with any of the protest leaders, watch for key phrases from the State Dept's handbook: Calling the government a "regime", emphasis on "Freedom" and "Democracy", that sort of thing. One has to wonder, where the fuck were they when they had absolutely no say at all on choosing their governor, who was appointed by the Queen in Britain?
That pro-democracy movement is a US backed conflation. Why would you trust anything they say?
That's like saying the US Oligarchs wouldn't do any back room deal to support the Chinese leadership long term to keep them holding onto $1.whatever Trillion us T-Bills.
It's like you guys think half way through a situation and ignore the reality in which the situation actually exists.
I don't have a clue what you are trying to tell me, but apparently I am ignoring the reality of the situation that actually exists and thinking only half way. Fair enough, but I have a feeling you may have misread the article's sarcastic tone and my reply to the poster who believes that HK's chief executive is giving the finger to Beijing.
Ayreos, Soooooo where did you get that avatar.
We'll see who wins in the end. I have a funny feeling this won't end well and they will come crawling to a Central Bank for help.
Last I checked, Hong kong has a central bank. So does China.
The Chinese government has a central bank. They own it. They run it. They control it. America's government does not.
Hong Kong people have 'GOT it' right from the beginning - is in their DNA now. The govt's policy has always been to leave as much money with the people as possible, no welfare, no big govt, etc. They have returned money like this to tax-payers before too, most recently during the depths of the GFC.
If only our Illegal Alien POTUS had been from Hong Kong.
That's no way to talk about King Putt.
I prefer Poof Fairy in Chief,
but he is a target rich environment;)
Good one.
I've also heard "Obi Wan Nairobi"
I hate them for their freedom
I hate them for their freedom
Show DIck some respect...
Extra cash in your pocket? ... the horror... the horror...
I knew there was something I liked about HK...
if only our government would do the same...
I love HK!
HK91/G3, PSG1, HK45, and don't forget the MP5/UMP family.
pods
Yeah Baby!
DaddyO
Don't be an idiot. This article is about as dishonest as Simon Black gets.
The Hong Kong government raises the majority of it's revenue from LAND SALES, not income taxes. This pushes property prices into the stratosphere and has people literally living in cages.
http://img.timeinc.net/time/daily/2009/0908/360_cage_0821.jpg
On top of this, Hong Kong has a broken sewage system (you can smell it from the street, is that a first world country???), one of the highest mortality rates from respiratory diseases on the planet from the choking pollution, and the smallest living space per capita in the developed world.
By all means move there if you think it sounds so great. I don't see Simon Black doing the same.
Thank for posting this. I was going to post 'Long Human-Sized Dog Cages'
Wow. You have been duped. HK'ers are some of the healthiest people on the planet. The women outlive everybody, and the men run a close second to the Japanese men in longevity.
Why does the American air make their people live such short lives? Why would anybody want to live there?
Duped? I lived there for years, the place is literally a shit hole.
Imagine how long the Chinese would live if they didn't live in a polluted shit hole.
http://www.bloomberg.com/news/articles/2010-10-07/hong-kong-pollution-ki...
http://www.worldlifeexpectancy.com/china-health-miracle
http://www.worldlifeexpectancy.com/world-health-rankings
I even got a $50,000 limit Bitcoin mastercard from Hong Kong. The US has a bad case of bankster infestation and things aren't going to change here until we get rid of them.
Too funny....!!
Fucking brilliant.
You'd think Bansters would clamor to invade and corrupt such a ripe place to parasite on, so what's keeping that place unsullied?
Sum Ting Wong.....
The next thing you know, those idiots will be de-pegging their currency from the $US...
...(in about two weeks)
Maybe they could do something about the pollution that is AWFUL.
they dont make the pollution. china makes the pollution and exports it directly to HK. shenzhen is a 30 minute boat ride across the water. shenzhen is a veritble shithole where massive factories spew shit into the air all day. tragedy of the commons at its finest.
Just like America in the 40's, 50's and 60's.
LOL
Or maybe do something about the cost of housing which is insane. Or the size of housing which is even worse (TINY APARTMENTS for the RATS)
Hong Kong people envy our welfare system.
Right. In a depression, its best to raise taxes - ideally to something above 100% - so that people will work super extra harder to avoid prison -
I guess Hong Kong already tried bringing in BofA staffers to rape and kill people, chop them up, and stuff them in suitcases - to stimulate the economy.
Im sure Gov-Co is still wondering why that didnt work.
Good one.
Ho Lee Fuk
I don't want their shitty fiat toilet paper , pay me in gold.
In other news, Paul Krugman's eyeballs have allegedly burst from his head.
I'm sure that's good for a Nobel prize in optics as well.
Great Article! That's all I've got to say about that! :-)
Who cares!
Next.....
A 'Hong Kong Fuey Chop' and...........POOOOOWWWW the USD/HKD peg snaps sending the Hang Seng crashing.
ROW FOR YOUR MASTERS AMERICA!
THE VALDEZ MUST STILL GET TO PORT!
For those of you keeping track, I am predicting an imminent de-pegging for the HKD. This will speed that move.
Make a note. You heard it here first.
Second? Pullmygfinger looks to be a few minutes ahead of you lol.
http://www.zerohedge.com/news/2015-02-05/hong-kong-doomed-foolishly-lowe...
It's amazing how you can mix certain things that wouldn't seem to work together and get something quite good. Like Choclate and Peanutbutter or Strawberry and Rubarb or in this case Western Capitalism with confucianism taoism and buddhist philosophy to end up with Responsible Government.
Very true... Look how great the US are after 30 years of tax cuts, moral leaders of the world thanks to their middle class that has benefited from all the wealth added thanks to tax cuts.
We gave their money back to some folks.
Reminds me -- haven't watched any Wong Kar-Wai fims in a whle. Loved the way he used Xavier Cugat tunes in 'Days of Being Wild.'
The Zionsist banksters are not going to like this little proof of the absurdity of Keynesianism.
Hong Kong has WMDs, and Nigerian "yellow-cake" in 3..2..
The banksters need to repay us.
A friend of mine calls tax rates a "barbarity meter." He says that the higher the levels of theft, rates, the higher the levels of venality, plunder, and brutality.
I have one of those. My meter has red-lined, quivering just below where it reads "Explode."
What about the children?
They're all on Facebook ...and won't notice a thing.
Hong Kong needs to get financial advice from Goldman Sachs, Mario Draghi, Janet Yellen and the other rocket scientists that work at the Fed. They would soon fix the surplus and put HK on a fiscal par with the US, Japan and Europe. Hong Kong could fuck up the rest of the world with their economic chicanery.
That HK government just don't know what they are doing, actually giving money back to the people, what a disgrace, there will surely be more riots now. And to think when I lived there I paid a whopping 13% tax, can you imagine the horror of it.
Way to go HK, I wish I was back there, best country in the world, I must visit soon.
Next thing these crazy fukers will do is eliminate their fiat and dump their central banking system into the ocean.
Then a false flag event, followed by a ficticious crisis requiring UN occupation and then WMF will need to swoop in and re-establish financial order... back to square one!
Next thing these crazy fukers will do is eliminate their fiat and dump their central banking system into the ocean.
Then a false flag event, followed by a ficticious crisis requiring UN occupation and then WMF will need to swoop in and re-establish financial order... back to square one!
They have declared war against their citizens! Regime change!
Just telling a friend yesterday that this is what Greece should be doing. A tax free zone for companies and citizens, and take a fee from deposits under a new 'secrecy' in-country banking system. Switch to a consumption 'only' tax ( as new industry and jobs increase), and let the good times roll. INDEPENDENCE from the East and West is the only real solution.
Um, yeah... because when you look at it in the long run, Reagan's tax cuts in the 80s really helped kick off today's party and brought us to where we are now...
China, let's party like it's 1989!
Since when is giving and taking the same thing? If Government spending did not go ballistic in Defense, and other 'Social Programs' there would have been a 'real' recovery. Anyway, since when does a Predient make economic policy? Really? I say that there was a recovery at that time..... but the Government sqander ALL the benfits plus billions more. Yes... back in those days billions meant something.
In a world of communism, only Hong King is Free.
Lord Keynes should be so lucky.
Ignorant ho's don't know about the multiplier effect. Need to take a macroeconomics course from a Maestro like Draghi or Yellen!
I think they meant Texas not taxes!
The HK economy is a counter-puncher beyond the pale of straight jacket regulators. They are not immune to corruption, but if one is caught, they pay the price of failure- unlike the weasels in western countires with their high-priced lawyers and connections.
HK also learns from watching the folly and dangerous mistakes of others. To wit, this allows them to make their own mistakes. Ambitious people can work themselves to death there and prosper on a consumer/ material scale. They are fixated on making money and the trappings of wealth and power.
Parasites don't do too well but do better than in many other big cities, particularly Asia. Hong Kong also has the world's highest IQ average of any country 107. That is a legacy of the British, not the peaceful liberation of '97. The quality of the city has been staight downhill since '97 turnover. Cantonese is disappearing as the primary language, and English is even receding. Mandarin is rising.
It is also a vision of a dark future- i.e. educated, indebted, workaholic, stock-piled humanity. They also have the benefit of having to organize a small if overcrowded population, which allows for more flexible government. But flexible they are not- following Deng's line of progress, give people economic freedoms, but keep your hands off political self-determination. They are undemocratic and unabashed in that. So they reap the plusses and minuses of the tyranny of the mediocre.
All things said, a few good seats for a ambitious, well-conected few. For the rest, there are coffin-sized, air conditioned, astronomically-priced, high rise human warehouses.
Before the British left they privitised public services but not in a good way.
They are now run be a few Oligarch families that use them for profits.
This is part of the reason for the recent demonstrations - the umbrella movement.
all that is good news for Hong Kong but there is one but
they ar eonly able to run the economy like this because THEY ARE NET EXPORTER
and it is impossible for everyone in the world to export more than to import
SOMEONE HAS TO BE NET IMPORTER
What's the latest with all that anti-China rioting going on there?