the only things sure in life are death and ...

Was it just me, or did anyone else have a good laugh when they saw the headlines this morning. The first article caught my eye, and I started reading:

To finance more govt spending to help the lower income:
GST will go up to 7 per cent
PM pledges more help in several areas, and more regular Workfare bonuses
By Lydia Lim, SENIOR POLITICAL CORRESPONDENT

HE Goods and Services Tax (GST) will go up from 5 to 7 per cent to pay for more government spending to help the lower income.

Mapping out his government's plan for the next five years and beyond, Prime Minister Lee Hsien Loong yesterday pledged to 'tilt the balance' of public spending in favour of lower-income Singaporeans, who are not benefiting as much as other groups from economic growth...

Whenever you see Lydia Lim's byline, you know that this is a matter of political sensitivity. And I think she was in top form because in just the sub-header and the first two paragraphs alone, we already see three mentions that the lower income groups will be the beneficiaries of this tax hike. It even mentioned that they would also alter the constitution to utilise some of the reserves. I read the article and of course was utterly convinced that my dollar would go towards those who needed it more than I.

But wait, my eye drifted across the page, and was captivated by yet another headline.

Corporate tax rate may have to be lowered

SINGAPORE is prepared to cut its corporate tax rate further to remain competitive in the global race for investments.

Announcing a hike in the Goods and Services Tax (GST) in Parliament, Prime Minister Lee Hsien Loong said Singapore might have to adjust accordingly if Hong Kong moved to lower its current rate of 17.5 per cent...

I don't know who wrote this one, and I don't really have much to say about it. Surely it is quite brief and to the point because the compelling logic of cutting the tax rate to remain competitive needs no explanation.

Anyway, I just started laughing then, because I couldn't help but wonder which editor does the layout for the front page. Because after all Lydia Lim's hard work, some simpleton might glance across the front page and, without reading, immediately jump to the misguided conclusion that the increased revenues from GST might not entirely benefit the lower income. After all, it might seem superficially obvious that an increase to the upper tax brackets would be a more exact approach to achieve the desired outcome professed. But I'm sure the economists have done their math right when they picked on the GST.

Perhaps there yet remains some rebellious streak in the mouthpiece.

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Added Later:
So I had dinner with an old friend and discovered that the GST hike was one of her projects. And apparently the government never intended to sell it purely as a means to offset lower-income aid, but the press decided to add its own spin ... to make it more palatable? Kind of backfired, if you ask me.

Among all the furor the GST raised, this stands out as a well-reasoned pro-GST post. Andy Mukherjee also explains it in layman'ss terms for Bloomberg. I'm tired of people railing at economics that they don't understand. Personally, I figure life goes on ...