For those who are not familiar with mathematical equations, perhaps a little explanation is needed on the subject of this post. The symbol ∵ and ∴ are the signs of logical argument and mathematical proof. ∵ means because and ∴ means therefore. So the former part of the subject in wordings reads because A=B therefore B=A.
Now back to the topic of this post. Have you ever heard someone said he/she really wants or does not mind to pay a big amount of tax (usually means salary tax) because only those who has a high salary then needs to pay high tax. This saying sounds quite logical because unless tax evasion is employed, if everything equal, higher salary can only lead to higher payable tax. Therefore it is always true when someone gets a high tax demand note then he/she must has already got a high salary job meaning this person is a high income one. So the equation of high income tax=high income is valid but then what if we swap the two sides of the equation into high income=high income tax, then is it necessarily valid as well?
This is something like the paradox in logic saying my father has beard so as long as one is bearded then he is my father. Apparently this is not true and the logic is too simple. Then how is it when it comes to the second equation in the above paragraph? The answer also seems to be not always true, at least in Hong Kong. Or be more precise, the equation is mostly applicable to salary income but not others. The reason is very simple because only salary income has a high co-relation with tax payable.
As high salary income leads to high income tax then is it still wise for anyone saying does not mind to pay a big amount of tax? Or more specifically speaking, is it still wise to wish to pay high tax for the sake of a high salary job? High salary individuals seem to be lucky as they have an high pay jobs but indeed they are the victims in the existing taxation. High salary income is bound to pay high tax but high income from other forms does not necessarily lead to high income tax at least here in Hong Kong where capital gain and interest/dividend income for an individual, as long as not as a result of business operation, are not subjected to tax.
The traditional thinking is that one should do their best in schooling for the sake of entering a good university which usually renders a better chance of getting a job in a well established corporation. When one works hard then hopefully can climb up along the corporate ladder to reach a high pay job. However, as high pay jobs are bound to paying high salary tax and due to the unfair taxation to wage-earners, for the same amount of income the tax payable between the salary income and interest/dividend income could be a big difference.
For all average wage-earners the disadvantages of earning a living with a job is easily understood like the ever increasing job insecurity, no autonomy on working time, salary often lags behind the inflation...etc. When putting the tax payable into account, it seems there is one more reason to rethink whether it is really smart hoping to pay high tax because of a high pay job unless one does not mind to share the hard earned money with the government.
