Comments on Goods and Service Tax (GST) and Wealth Tax

In my previous post titled "Why you work so hard but you are still poor?", I mentioned that:

"When taxes have been tweaked and/or new taxes implemented by the Government, we are seeing more and more of such taxes in the form of Goods and Services Tax (GST) or other form of "wealth tax".  For example, recently Malaysia just introduced GST.  On the surface, we were told that these are "wealth tax" that only taxes the people who are "rich", but really what you are seeing is that such taxes, instead of taxing the genuinely rich (the top 1% income earners and rich businessmen), these "wealth taxes" are targeted at the majority of the population and middle-income families so that they do not tax the genuinely rich so much."

In this post, I would like to give further comments on such Goods and Service Tax (GST) and Wealth Tax. 

Give you an example to illustrate these so-called "wealth tax" or consumption tax: If the government wishes to rise $1 Billion in taxes from a population of 1 Million, they could choose to:

a) Raise the income tax of the top say 1% genuinely rich (top 1% income earners and big businesses) by collecting $1 Billion from the top 1% or 10,000 people, thus each of the rich paying $100,000; OR:

b) Raise the tax from the majority of the 90% of the population or 900,000 people, thus each of them paying about $1,111.

We are seeing more and more that government preferring method (b) in raising additional taxes! 
On the surface, doing (b) seems fair, until we diagnosed the incomes of the various groups:
(i) Top 1% people earn at least $500,000 a year! 
(ii) The rest of the people do not even earn $200,000 a year! 
For the past 20 years, the top 1% people's income increases exponentially compared to bottom 80% of the people!  This also seems to be the case in Singapore!

Example, the lowest income earners earn about $500 per month 20 years ago and now they only earn $1000 per month (after the introduction of minimum wages in Singapore!).  Ops, sorry, should be "Progressive wages" as some hard-core PAP supporters would like us to call it.  To these people, "minimum wages" like those in US and the West are bad, while Singapore's "progressive" wages are good!  Really?  We can investigate left and right and up-side down and the Singapore's "progressive wages" include "minimum wages" as a core component, so isn't this a form of "minimum wages"??? 
On the other hand, the top salary people have their salary increased from about $500,000 per year to a few Millions $ a year! 

What about the general people, like the fresh graduates pay?  Well, 20 years ago, a fresh graduate from engineering course can get a salary of about $2,200 per month.  Fast forward now, the same fresh graduate can only get a salary of about $3,000 per month or an increase of about 36%. 

And oh, I should not forget to mention that cost of basic living is like having gone up by >200% over the past 20 years! 

After knowing these above facts, would you still think that raising taxes via method (b) above is more fair than method (a)?  After all, for past 20 years, the top-income earners have benefited the most and obtained several hundred % increase in salaries from Singapore's GDP progress (including the top civil servants and Ministers) vs the bottom 80% or so, so isn't it fair to ask them to bear more?  Instead, they received an incentive of their income tax being slashed from 33% to 20% as a result of introducing GST! 
Is it fair to make the bottom rang income people pay more taxes when they are already making ends meet with ever increasing living cost inflation as a result of their Govt's own policy? 

Singapore's GST is a very good example isn't it? 
Before 1994, there is no GST in Singapore, and the highest income earners pay 33% income tax and businesses pay 30% corporate tax.  The income tax is progressive, and about bottom 40% people pay no taxes. 
Since introduction of GST in 1994, GST has been raised to 7% while highest income earners' income tax has been slashed from 33% to 20% while businesses now only pay 17% corporate tax (vs 30% before 1994).  This has resulted in significant tax reduction collected from highest income earners and businesses, and this short-fall in taxes have been made up significantly from GST collection which collects taxes from 100% population in Singapore! 
Note that Singapore's GST has no tax exemption for basic necessities (unlike those in other countries, e.g. UK, Europe etc), hence hitting the poor and the lower middle-income very hard! 
For a comparison, for example in UK, basic living necessities (e.g. water, gas, and electricity), food necessities, medicine, children needs are all exempted from GST (in UK they called it Value-Added-Tax or VAT).