We're not "all the same"

Classes ended Tuesday, and we had an optional review session for one of our classes on Wednesday. This class is taught by a visiting prof, whom I've always thought was a little eccentric, but generally a nice guy. He sometimes seems like he doesn't know what he's doing, and he's not good at answering questions posed in class, but I'm not here to critique his teaching. Anyway, I decided not to go for the review, because I was pretty familiar with the material, but my friend did. And here's what happened during that class.

First, some background information. This friend of mine is Canadian, born and raised in Canada, although his parents are from Taiwan. Next, my prof likes to digress and give lots of unrelated anecdotes in class, and he's commented on more than one occasion on how impressed he is by the diversity if the student population in McGill.

So now, back to the review session. He's teaching, and then he goes on another of his tangential spiels, which results on him talking about the diversity and of how he doesn't get that back in the university where he's from (south of the border). Then he starts giving examples, by pointing out students in his class, with whom I (or rather my friend) assume he's spoken to before. "Like you, you're from Paris, and you, you're from..." Then he gets to my friend, and he says "from China".

So my friend is really mad, and goes to speak to the prof after class, partly because he had something else to speak to the prof about anyway. My friend tells the prof that he really shouldn't be telling people where they're from, and then he points out that he is Canadian, born in Canada, and that his family is from Taiwan, not China. And then my prof says:

"Oh, to me they're all the same"

Never mind the whole Taiwan-China issue, my friend was just too taken aback to react. Honestly, I'm glad I wasn't there. Because if I was, I would have lost it and probably shouted at him.

No, we're not all the same. Not everyone of Asian descent was born in Asia, and not everyone from Asia is from China. And you're a prof. You really should know better. And if you don't, then you really should know better than to say stuff like that.

Living in Montreal, cosmopolitan city and all, I have experienced racism before. Usually, I am unaffected. But I am truly astounded by the ignorance displayed by my prof. And in the course of apologising to my friend, he said numerous other things that just further proved his ignorance (which my friend told me but I can't remember exactly).

When my friend related this incident to me, I was pretty shocked and also angry as well. But I don't have the eloquence or the lucidity to say everything that's in my head right now. Also because I think the issues of race, ethnicity and nationality are complex ones. I'm also unsure if I should feel sorry that my prof is so ignorant and doesn't know it, or if I should be outraged because his remarks were so insensitive.

As of now, I still have not collected all my thoughts on this, and with exams looming, by the time I do, the anger might have passed. I'm still trying to get my head around the fact that a professor can be so ignorant.

In whose best interests?

There's a blog post here about how raising consumption taxes is the best way to go about financing help schemes for the poor. It's written by an economist, and it raises the point that consumption taxes do not distort price signals and hence do not add "excess burden" onto the economy. The contention is that everyone is taxed equally, but only the poor receive the help packages, so overall they are better off.

I think these contentions miss the point. As I stated in my letter, these help schemes won't be indefinite, and I doubt they will be around for as long as the tax increase will be. But going further than that, we have to recognise what is best for the economy may not be what is best for the lower-income. The widening income gap already suggests this as the poorer section of society is being left behind as the rest of the economy develops. So, if we want to help the poor, we should be looking at what works best for them, not what works best for the economy. We have to accept that what is best for the lower-income may not be good for the economy.

A widening income gap is undesirable for reasons other than economic ones. We have to be aware that this issue encompasses more than just economics, and we have to keep in mind the rationale for the increase - to help the lower-income. All the arguments for raising the GST I've seen so far are about how its best for the economy, how it lets us remain competitive and stuff like that. None of them address the reason why this is an issue in the first place - what is best for the poor?

More questions, but I don't have any answers

My letter has been published, and it's more or less there in its entirety. They only thing they removed was the comparison I did, and I think the essence of what I wanted to say was very much preserved. Oh, and they used "Government" when I used "government".

Today, there is another article in the Straits Times where our defence minister Teo Chee Hean re-iterated the point that the government's (no capital "g") intention is not to hurt the lower income. I don't doubt that, but I do believe the consequences of the GST hike will be exactly that, for reasons I have already outlined in the letter.

The argument that a growing economy will help them to shoulder this burden is, in my opinion, iffy at best. For one, there is the widening income gap, which already shows that the poor are getting left behind as the rest of our economy grows. This better ability to pay taxes doesn't apply to them. If the government can come up with the figures to show that GST is not regressive, or if they have concrete figures to show how their help packages will help this group of people, not only in the short term, but also in the long term, then I stand to be corrected. But as it stands, I don't see how we are going to be able to help the lower-income when they are going to be the ones paying for it.

So, if not the lower-income, who is going to pay for it? Something's got to give, and if we want to help this group of society, we are going to have to finance it somehow. As I mentioned, exempting necessities from GST might go some way into mitigating the burden on the poor. It will also however, affect tax revenues. So that means we might have to end up paying even higher GST. Without figures on tax revenues and government spending, I do not know if this is necessary. But I do feel that if our government wants to increase GST, it should at least have some figures back up its claim.

Also, I think that any increase in GST should be carefully considered. Have studies or surveys been carried out to map out the spending of the various income groups in our society? If so, where are they? And if not, then they should be undertaken. If spending patterns can be determined, then we will be able to gauge how regressive the GST really is, and how effective exempting necessities will be it mitigating that effect. In addition, it would also help us determine how our various taxes should be structured so as to help the lower-income.

As for cuts in income and corporate taxes, how much revenue does the government generate from these 2 sources, especially in comparison with revenue from GST? Teo Chee Hean mentioned that reducing income and personal taxes would encourage individuals to innovate and create business. I'm assuming that the logical extension is that this innovation and business will in turn be beneficial to Singaporeans.

The question is, how much of the benefits of greater innovation and businesses really go back to the lower-income? Furthermore, how much of an impact does lowering taxes really have on innovation and business anyway? When people want to start up businesses here, is it really the corporate tax structure that they view as a hindrance? Or are there other factors like red tape which might play a bigger role in discouraging people from doing so? In effect, what I'm asking is how much of a disincentive is the rate of corporate and income tax in reality?

These are just some of the questions I feel should be asked when we are considering the best way to finance help for the poor. There probably are other things to consider as well, but this is just off the top of my head. For now, I'm just waiting to see if there will be an official response.