Interesting...

Got this post from my friend Samuel... forwarded messages I guess... quite interesting!

Sent: Tuesday, November 28, 2006 2:15 PM
Subject: FW: Impact of the 7% GST Hike - Interesting

This is a good one and must forward a copy to our Finance Minister and the Prime Minister. The rich become richer and the poor becomes poorer.

Example 1
In 2006, if after rebates etc and your net taxable income is $60,000, the income tax you need to pay is $2,700 ( 8.75%). If you spend $800 a month on needed goods and services, the GST paid for 5% will be $480 Total=$3,180 in Tax paid.

In 2007, if after rebates etc and your net taxable income is $60,000, the income tax you need to pay is $2,600 ( 8.50%). If you spend $800 a month on needed goods and services, the GST paid for 7% will be $672 Total=$3,272 in Tax paid.

From $3,180 to $3,272, the effective increase is +2.89%.

Example 2
In 2006, if after rebates etc and your net taxable income is $400,000, the income tax you need to pay is $61,650 (21%). If you spend $4,000 a month on needed goods and services, the GST paid for 5% will be $2,400 Total=$64,050 in Tax paid.

In 2007, if after rebates etc and your net taxable income is $400,000, the income tax you need to pay is $58,700 (20%). If you spend $4,000 a month on needed goods and services, the GST paid for 7% will be $3,360 Total=$62,060 in Tax paid.

From $64,050 to $62,060, the effective decrease is -3.11%.

Example 3
In 2006, if after rebates etc and your net taxable income is $25,000, the income tax you need to pay is $187.50 ( 3.75%). If you spend $800 a month on needed goods and services, the GST paid for 5% will be $480 Total=$667.50 in Tax paid.

In 2007, if after rebates etc and your net taxable income is $25,000, the income tax you need to pay is $175 ( 3.5%). If you spend $800 a month on needed goods and services, the GST paid for 7% will be $672 Total=$847 in Tax paid.

From $667.50 to $847, the effective increase is +26.89%.

The fact is: The poorer you are the more the GST is going to make you poorer. So you must make more money and spend more money to save on GST.