Thursday, November 06, 2014

Capital in Hong Kong

Thomas Piketty’s “CAPITAL in the Twenty-First Century” makes a convincing case that inequality in USA is getting worse in the past 30 years.  It is now just as bad as in Europe 100 years ago, at the eve of the First World War.  
How is it in Hong Kong?  I have not seen equivalent studies.  But I suspect it is not any better.  Hong Kong’s superrich are still a bit below the level of the superrich in the USA.  On the other hand, the poor in Hong Kong are most likely worse off than their counterparts in the USA.  

According to Piketty and many other economists, a progressive income tax is the best way to address that widening inequality.  Based on this analysis, the situation is Hong Kong is likely to be worse.  Hong Kong does not really have a progressive tax system.  The rich also have many more ways to reduce the amount of tax that they have to pay.  

I am not optimistic that anyone will be able to analysis the situation in Hong Kong soon.  To do that you need access to tax data.  Given that our government tends to be friendly to the pro-establishment and vice versa, it is unlikely that it will make the data available to those who might come up with unfavourable conclusions.  

Note: Those buildings, people, ... in the photos are, obviously, miniatures. 

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