There are some places in the world, however, that are getting it right. Singapore is one such place. Rather than concerning itself with dropping bombs and establishing military bases in other countries, the government of Singapore is living within its means setting conditions for the continued growth and prosperity of its residents.While we raise taxes on producers and business along with mandating even more onerous regulations is it any wonder that there is no job growth, the tax base is shrinking, and anybody with any money and sense is leaving the US. I have said it before and I will continue you saying it, if you harass capital it will leave and everyone is the worse off. When will we figure this out?
This morning, I received a welcome email from one of my prime contacts on the ground in Singapore. As it turns out, the government there is cutting its tax rates. Again. And my friend, a “who’s who” in the Singapore corporate structure industry, sent along a very helpful guide to show me just how serious Singapore is about growth.
Individual income tax rates, which are already among the lowest in the developed world, are being cut. For example, income in the range of S$80,000 to S$120,000 (S$ is the Singapore dollar… this is roughly $65,000 to $95,000 USD) will now be taxed at a marginal rate of just 11.5%, down from 14% before.
For companies, corporate profits below S$100,000 (roughly $80,000 USD) under the old rate schedule were not taxed. This is still the case… and one of the reasons why Singapore is such an attractive draw to entrepreneurs– because, for a startup, those initial profits are incredibly important.
The next S$200,000 in profits (roughly $160,000 USD) used to be taxed at 8.5%. This has been cut to 6.8% under the new scheme, so the effective tax rate on roughly the first $240,000 USD is only 4.5%. Pretty reasonable.
The next S$194,118 in profits (roughly $154,000 USD) used to be taxed at 17%; this has now dropped to 13.6%… and finally, all profits above S$494,118 (about $392,000 USD) are taxed at 17%.