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Alex Lo

When it comes to a capital-gains tax, rich people will go to extraordinary lengths to prove the impossible and deny the undeniable. 
I was just reading how the great and the wealthy in America have been lining up to round on President Joe Biden’s proposal to increase that tax’s rates on the richest to fund his trillion-dollar infrastructure plan.
You know, the usual specious arguments about killing entrepreneurship and undermining those great creators of jobs, the captains of industry. Biden’s tax plan, some claim, would end up decreasing tax revenue. 
These are the same people who claim a tax cut will pay for itself, and then some. No, it doesn’t.

But at least most developed economies have a capital-gains tax. Hong Kong doesn’t even have that. 
Besides the land and property monopoly by the axis of the government and big developers, that’s one reason why our rich just keep getting richer. And you think their philanthropy that gets their names all over university and hospital buildings is so heart-warmingly generous?
Given our record deficit of HK$257.6 billion, isn’t it time for Beijing to say to the rich guys and their families: enough is enough, time to pay up? Remember, it’s against the Basic Law, that is, it’s unconstitutional, for the Hong Kong government to have deficits, according to a strict reading of it.
The central government has cracked down on the democrats and other anti-government activists, many of them from the middle and professional classes. It was carried out in the name of social stability and governability. 
Actually, those same reasons would be equally, or even more justified, in carrying out a taxation crackdown. 

I have never understood why people who earn by the sweat of their brow have to pay a salary tax equivalent to a month and a half, or even two months, of their wages in Hong Kong while a stock punter could make a killing with a few keystrokes on his computer – and/or speculating on real estate – and gets to keep all his profits. 
That just seems insane.
Apparently, even the original Marxist, Friedrich Engels himself, thought that was perfectly OK. In a letter he wrote to Marx, he argued that profiting from stock trading “simply adjusts the distribution of the surplus value”, and doesn’t expropriate it from workers. 
Marx seemed to agree with him, as he was himself a stock speculator on the London Stock Exchange – the citadel of 19th century capitalism – whenever he had spare cash. According to some biographers, Engels lived off his sizeable stock portfolio and frequently subsidised Marx from it.


You have to say, wow, how does that compute, Friedrich? Aren’t the shareholders the company owners who extract profits from the workers? After all, what are dividends but earnings based on extracted surplus value?
But as I said, when it comes to paying up their fair share, such as through taxes, people make up all sorts of excuses not to do so. 
When it comes to literally the bottom line, perhaps Marx and Engels weren’t so different from today’s Wall Street titans – or Hong Kong’s super-rich – who think tax is the dirtiest of words in any language.


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My Take

Deficits, anyone? Time for a Hong Kong capital-gains tax

Unlike most developed economies, Hong Kong does not have a capital-gains tax. Photo: Edmond So 

Why do people who earn by the sweat of their brow have to pay a salary tax equivalent to a big chunk of their wages in Hong Kong while a stock punter could make a killing with a few keystrokes on his computer – and get to keep all the profits? Photo: Bloomberg

Cyclists pass under giant portraits of socialism theorists Karl Marx and Friedrich Engels, in Beijing’s Tiananmen Square in April 1986, ahead of Labour Day celebrations. Photo: AFP

Hong Kong property: raising tax rates on rental assets is unfair

Residential buildings seen at sunset in Tseung Kwan O, Hong Kong on August 14.  Photo: Sun Yeung

How to fix Hong Kong’s budget deficit: tighten belts and slim down

Empty streets and closed shops on February 9 in Tsim Sha Tsui, one of Hong Kong’s busiest shopping and commercial districts. The city’s economy has been in recession for two years. Photo: Nora Tam

Hong Kong’s deferred vacancy tax carries a US$279 million price tag, adding to the financial woes of a recession-busting budget deficit

Aerial view of residential buildings in the Yau Tong area, east of the Kowloon Peninsula in Hong Kong, on 29 February 2020. Photo: Sun Yeung

Facade of Hong Kong multi-storey residential buildings seen in an aerial view of Tai Kok Tsui. 20AUG19 SCMP / Roy Issa

Aerial view of a residential building on Peak Road, the Peak. 14SEP18 SCMP / Roy Issa

Opinion


Why should Hong Kong’s wage slaves pay up to two months of their earnings in taxes while profitable stock punters and property speculators – and our tycoons – get to keep all their gains?



Hong Kong economy

Hong Kong property

Capital gains tax

Hong Kong

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column