Sometimes I think, any place with low tax rates and just have minimal governmental involvement will do very well in the global economy.
I got the feeling that people are moving into my country (and Hong Kong) because of our low tax rates as compared to their home countries. This is especially true for Indonesians and Chinese, where top-income marginal tax rates are over 40%. It's around 18% in Singapore (I think) and 17.5% in Hong Kong.
Perhaps if all the government does is to reduce all expenditure except on defense and the common welfare that benefits all citizens, it would be better for all of us. There will be incentives for everyone to work hard on whatever they have.
However, I see that this assumes everyone has personal property and that the state really goes all the way to protect those property rights, through strong defence. In addition, there is always a group of disadvantaged people who cannot even work hard, as they can't make lifestyle choices to make themselves better.
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I got the feeling that people are moving into my country (and Hong Kong) because of our low tax rates as compared to their home countries. This is especially true for Indonesians and Chinese, where top-income marginal tax rates are over 40%. It's around 18% in Singapore (I think) and 17.5% in Hong Kong.
Perhaps if all the government does is to reduce all expenditure except on defense and the common welfare that benefits all citizens, it would be better for all of us. There will be incentives for everyone to work hard on whatever they have.
However, I see that this assumes everyone has personal property and that the state really goes all the way to protect those property rights, through strong defence. In addition, there is always a group of disadvantaged people who cannot even work hard, as they can't make lifestyle choices to make themselves better.
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