Property Taxes - Why They So Low?

[DonJuanDemarco]

Property taxes in Thailand are a joke. Or at least for outlying areas, where I happen to have secured properties. I assume taxes are also ludicrously low in the cities, don't know. However, in the countryside, property taxes are essentially non-existent. Methinks that's because so much acreage is tied to Thai VIP big shots, and they quite like avoiding taxes - as it fits with their ultra-selfish ways of going through life.

Just another reason to live here.

[samran]

Fairly simple really. While I'd love to see a property tax of some sort across the board to beef up governemnt coffers, there are too many vested interests.

Solution?

Grandfather anything under the old rules that was bought before the royal assent of the legislation. They stay under the old rules. Anything bought, and then subsequently sold after that date cops a land tax.

Keeps to Phu Yai happy, means that Thailand misses out for another generation on taxes which could be used to develop infrastructure, but you have to start somewhere.

[DonJuanDemarco]

Its sooooooooooooo much easier for a poor Thai to become a rich Thai than it is for a poor American to become a rich American. Yes, its easier for Americans to borrow for schooling. That is where the line ends. The cheap labor + lack of huge business conglomerates controlling every sector of business makes it very easy to run a small business here. if Thailand was America you could pretty much guarantee there wouldnt be any of these independent food carts on every corner. it'd be mc-cart on every corner and the average somchai would never be able to compete with them.

[DonJuanDemarco]

Fairly simple really. While I'd love to see a property tax of some sort across the board to beef up governemnt coffers, there are too many vested interests.

Solution?

Grandfather anything under the old rules that was bought before the royal assent of the legislation. They stay under the old rules. Anything bought, and then subsequently sold after that date cops a land tax.

Keeps to Phu Yai happy, means that Thailand misses out for another generation on taxes which could be used to develop infrastructure, but you have to start somewhere.

so the solution is to basically say that the ultra rich don't have to participate in the tax? ... lol.

[Lancelot]

Grandfather anything under the old rules that was bought before the royal assent of the legislation. They stay under the old rules. Anything bought, and then subsequently sold after that date cops a land tax.

Keeps to Phu Yai happy, means that Thailand misses out for another generation on taxes which could be used to develop infrastructure, but you have to start somewhere.

Grandfathering might be a solution but vested interests are never easy to overcome-not only in Thailand but in all countries.

But there are many ways to "pluck the goose", Income taxes, VAT, Luxury surcharges but of course it brings us back to the starting point-the powerful agreeing to share the wealth.

FWIW, there is a lot of discussion about the "equity" of property taxes in the USA too. The argument against being in the past, owning land was the main generator of personal wealth in the US. Now it is much less so.

[jasreeve17]

Heng says: "Those are all pluses that can be had with the current budget. A property/inheritance tax IMO would cripple the poor more than the well to do.... unless we're talking about those "more fair" towards the poor taxes that folks like to tag on at the last minute of an argument.... "

Obviously, I disagree Heng. Banded taxation systems are normal all over the world, and work very well. I personally believe we should not see the rich as an easy target for taxation and over-tax them. Also, we must offer sensible tax relief for elements of our society who are less able to pay.

I don't like inheritance tax, period. You are taxed on your earnings and what you buy throughout your life - all inheritance taxes are wrong and should be scrapped IMHO.

My many disagreements with Heng are usually down my perception that he's very traditionally Chinese clannish with a large injection of modern US capitalism thrown in. I disagree with both of these ideas; I believe in a free market economy with a strong sense of social responsibility - which means controls on business practice and markets, taxes, help for the needy, opportunities for all.

The problem with the Thai system is you have the pretence of a free market which is in reality controlled by clans who refuse any controls on their business practice, are purely self serving, don't want taxes because they don't benefit from them in their system where the needy are a required group (required to abuse...) and always close down opportunities for anybody outside of their clan. It's not so unusual in asia; you could also say that the US is very much set up in a similar fashion (?) - I don't have enough knowledge of the US to say.

I see the clans as potentially the downfall of this world because, as Heng ably pointed out, they have no interest in any type of welfare outside of their immediate clan. We must change to look at the world and our localised communities as societies, to integrate and work together. I hate communism and stupid work from the likes of KM's etc because they just develop into clannish forms of govenance at the worst level.

All countries benefit from well managed taxation systems. Indeed, no society can develop without them.

Edited September 29, 2009 by jasreeve17

[DonJuanDemarco]

i need help with some garden work? any "you don't have to pay me" participants?

...didn't think so

[samran]

Fairly simple really. While I'd love to see a property tax of some sort across the board to beef up governemnt coffers, there are too many vested interests.

Solution?

Grandfather anything under the old rules that was bought before the royal assent of the legislation. They stay under the old rules. Anything bought, and then subsequently sold after that date cops a land tax.

Keeps to Phu Yai happy, means that Thailand misses out for another generation on taxes which could be used to develop infrastructure, but you have to start somewhere.

so the solution is to basically say that the ultra rich don't have to participate in the tax? ... lol.

I didn't say it was fair...but it was a start.

[Heng]

Fairly simple really. While I'd love to see a property tax of some sort across the board to beef up governemnt coffers, there are too many vested interests.

Solution?

Grandfather anything under the old rules that was bought before the royal assent of the legislation. They stay under the old rules. Anything bought, and then subsequently sold after that date cops a land tax.

Keeps to Phu Yai happy, means that Thailand misses out for another generation on taxes which could be used to develop infrastructure, but you have to start somewhere.

so the solution is to basically say that the ultra rich don't have to participate in the tax? ... lol.

I didn't say it was fair...but it was a start.

Academically speaking it would be good start.

On ThaiVisa, I think there are too many people hoping/cheering for a mulligan type option.

[DonJuanDemarco]

Fairly simple really. While I'd love to see a property tax of some sort across the board to beef up governemnt coffers, there are too many vested interests.

Solution?

Grandfather anything under the old rules that was bought before the royal assent of the legislation. They stay under the old rules. Anything bought, and then subsequently sold after that date cops a land tax.

Keeps to Phu Yai happy, means that Thailand misses out for another generation on taxes which could be used to develop infrastructure, but you have to start somewhere.

so the solution is to basically say that the ultra rich don't have to participate in the tax? ... lol.

I didn't say it was fair...but it was a start.

a start to what? go take a stroll through the African American areas of big cities and see how successfully wealth distribution and socialism worked in the usa. these programs keep on going because the government is a monopoly. an unsuccessful business would go bankrupt, an unsuccessful government raises taxes to create more funding.

all the concerned here don't need government mandates to distribute their wealth. go out today and start giving it away in the form of donations - but that is not really the objective, the objective is to knock down those above you on the ladder + liberal coffee house ideologies that don't match up to the way they actually live.

[samran]

Fairly simple really. While I'd love to see a property tax of some sort across the board to beef up governemnt coffers, there are too many vested interests.

Solution?

Grandfather anything under the old rules that was bought before the royal assent of the legislation. They stay under the old rules. Anything bought, and then subsequently sold after that date cops a land tax.

Keeps to Phu Yai happy, means that Thailand misses out for another generation on taxes which could be used to develop infrastructure, but you have to start somewhere.

so the solution is to basically say that the ultra rich don't have to participate in the tax? ... lol.

I didn't say it was fair...but it was a start.

Academically speaking it would be good start.

On ThaiVisa, I think there are too many people hoping/cheering for a mulligan type option.

Grandfathering is pretty common with things like this.

Australia introduced a capital gains tax in 1983. To get the law through parliament (given conservative land holders could block it) they made any assets owned pre-1983 CGT exempt.

It allows an open ended transition period, everyone is happy, and government gets a slow, but increasing income stream.

[Heng]

Heng says: "Those are all pluses that can be had with the current budget. A property/inheritance tax IMO would cripple the poor more than the well to do.... unless we're talking about those "more fair" towards the poor taxes that folks like to tag on at the last minute of an argument.... "

Obviously, I disagree Heng. Banded taxation systems are normal all over the world, and work very well. I personally believe we should not see the rich as an easy target for taxation and over-tax them. Also, we must offer sensible tax relief for elements of our society who are less able to pay.

I don't like inheritance tax, period. You are taxed on your earnings and what you buy throughout your life - all inheritance taxes are wrong and should be scrapped IMHO.

My many disagreements with Heng are usually down my perception that he's very traditionally Chinese clannish with a large injection of modern US capitalism thrown in. I disagree with both of these ideas; I believe in a free market economy with a strong sense of social responsibility - which means controls on business practice and markets, taxes, help for the needy, opportunities for all.

The problem with the Thai system is you have the pretence of a free market which is in reality controlled by clans who refuse any controls on their business practice, are purely self serving, don't want taxes because they don't benefit from them in their system where the needy are a required group (required to abuse...) and always close down opportunities for anybody outside of their clan. It's not so unusual in asia; you could also say that the US is very much set up in a similar fashion (?) - I don't have enough knowledge of the US to say.

I see the clans as potentially the downfall of this world because, as Heng ably pointed out, they have no interest in any type of welfare outside of their immediate clan. We must change to look at the world and our localised communities as societies, to integrate and work together. I hate communism and stupid work from the likes of KM's etc because they just develop into clannish forms of govenance at the worst level.

All countries benefit from well managed taxation systems. Indeed, no society can develop without them.

And from my point of view is that if everyone adopted the simple protocol of taking care of their own (and I think you'll find that the Chinese don't have a monopoly on that one... that the middle to upper ends of most societies are made up of people who live their lives this way), no one else would need to.

I simply disagree with the folks who say: "no... it'd be much easier/better to have fancy legislation, thousand+ page tax codes, and lots and lots of NGO's and non-profit groups instead." My way, anyone can start at any time, today. No need to convince anyone else or worse yet sit/wait/hope/pray for someone else to do it for you.

[jasreeve17]

Heng, it's easy to say when your group (maybe not personally, but ideologically) go out of their way to stop opportunities for others...

'Just looking after their own' might be okay if it was true, but it's untrue; these folk strive to stop others from climbing up the ladder, so to speak. We need legislation, and we need a fair society, we need rules and regulations to enable everyone a fair go - equal opportunities. Clans work for themself in two ways; by improving their clan, by inhibiting other clans (indeed, any other group) from growing - this latter point is the problem; in Thailand, in America and in China (though China appears to be improving at a far quicker rate than most).

DonJuanDemarco, I find your 'liberal coffee house ideologies' comment offensive. I gave up a high London salary and position to do what I do now - helping others every day rather than stepping on their heads to get a meagre foot-up myself. We live in a society where we cannot survive alone, we have responsibilities for ourselves, others and future generations; I choose to live up to these responsibilities and have little respect for others with weak egotistic views.

[samran]

Fairly simple really. While I'd love to see a property tax of some sort across the board to beef up governemnt coffers, there are too many vested interests.

Solution?

Grandfather anything under the old rules that was bought before the royal assent of the legislation. They stay under the old rules. Anything bought, and then subsequently sold after that date cops a land tax.

Keeps to Phu Yai happy, means that Thailand misses out for another generation on taxes which could be used to develop infrastructure, but you have to start somewhere.

so the solution is to basically say that the ultra rich don't have to participate in the tax? ... lol.

I didn't say it was fair...but it was a start.

a start to what? go take a stroll through the African American areas of big cities and see how successfully wealth distribution and socialism worked in the usa. these programs keep on going because the government is a monopoly. an unsuccessful business would go bankrupt, an unsuccessful government raises taxes to create more funding.

all the concerned here don't need government mandates to distribute their wealth. go out today and start giving it away in the form of donations - but that is not really the objective, the objective is to knock down those above you on the ladder + liberal coffee house ideologies that don't match up to the way they actually live.

gotta be an american. No one else is capable of sprouting this Fox news drivel. A little hint, while accusing someone of being a socialist in the US might constitute an insult, for the rest of the world all it means bugger all. We don't care about lables, never have. What you call socialism the rest of the world considers sensible economic policy.

Liberal? I'm a right wing economist my friend. What I am about is fair an even taxes which don't distort the economy. I'm not about preferential investment structures which avoid taxes. Taxes, spread evenly, keep rates low for everyone. Make the market work - the best way to help everyone. Only where the market fails, and then fails badly, government intervenes.

Nothing about distributing wealth. More for paying for roads, schools, powerlines, healthcare and the odd gunboat to keep Cambodia infringing on Thai waters.

[DonJuanDemarco]

by fair and equal taxes you mean a percentage, in which case my percentage might be ten times your own? then shouldn't you only get to drive on those roads 1/10th of the time i do? that would be fair. but when most people say "whats fair" they just mean "whats good for me".

[samran]

by fair and equal taxes you mean a percentage, in which case my percentage might be ten times your own? then shouldn't you only get to drive on those roads 1/10th of the time i do? that would be fair. but when most people say "whats fair" they just mean "whats good for me".

so I take it you don't believe in proportionally set taxes then? All flat taxes, which are regressive, are usually advocated by well off economic neanderthals who are basically passing on the cost and asking the middle class to subsidise their tax cuts. "whats good for me" is very true.

and i take it you don't understand/reject the concept of declining marginal value (of income).

If this is the case, I'm not going to argue.

Edited September 29, 2009 by samran

[jasreeve17]

Some excellent points in Samran's last couple of posts.

Edited September 29, 2009 by jasreeve17

[samran]

Some excellent points in Samran's last couple of posts.

and now I'll be challenged to a wrestling match in Siam Square as a result.

[Heng]

Heng, it's easy to say when your group (maybe not personally, but ideologically) go out of their way to stop opportunities for others...

'Just looking after their own' might be okay if it was true, but it's untrue; these folk strive to stop others from climbing up the ladder, so to speak. We need legislation, and we need a fair society, we need rules and regulations to enable everyone a fair go - equal opportunities. Clans work for themself in two ways; by improving their clan, by inhibiting other clans (indeed, any other group) from growing - this latter point is the problem; in Thailand, in America and in China (though China appears to be improving at a far quicker rate than most).

That's a real broad generalization without any examples. It sounds no different to me than 'the Steelers went out of their way to stop the Cardinals from winning last year's Superbowl,' or 'how Juan Martin Del Potro went out of his way to stop Federer from winning his 6th US Open.' Someone's gotta win, someone's gotta lose. But luckily, if you have a positive outlook, there are indeed prizes and opportunities no matter what place you get. There's nothing wrong with aiming high, but all too often, everyone wants a shortcut, they want it now without putting in the time and the effort.

"You keep me from succeeding by succeeding yourself" IMO isn't an argument.

[GarryP]

Wasn't it Warren Buffet (spelling?) who said the US tax system is all screwed up when, as is the case, he is paying a lower percentage income tax than his seccretary?

[Heng]

The US problem is basically the same a local Thai country family. The problem isn't the revenue system, it's the spending system, the only thing left in the bank at best is your credit.

[samran]

Wasn't it Warren Buffet (spelling?) who said the US tax system is all screwed up when, as is the case, he is paying a lower percentage income tax than his seccretary?

didn't you know?? It is only socialism if you tax the rich....

But raising /maintaining proportionally higher taxes for middle income earners to subsidise tax cuts and other tax minimisation vehicles for the wealthy, well thats just good old capitalism.

Government involvement? Socialism if you are trying to fund health care, though not refused if you are a bank deemed to big to fail.

Edited September 29, 2009 by samran

[DonJuanDemarco]

the middle class will always be the ones who get screwed when taxes go up. the rich and these corporations are too smart for it. how many self employed individuals do you think are honest on their tax returns?

Edited September 29, 2009 by DonJuanDemarco

[antony77]

Asked and answered.

When Abhisit broached the subject of raising property and inheritace taxes to fund a more socially equitable society he was figuratively shot down in a hail of bullets. If the idea gets much traction, maybe figurative will change to literally.

MP's all hold properties!!!!

[CTM]

If any property tax system is set up there is chance that it may have the unintended consequence of causing some of the "Land Rich, money poor" Thais to be forced to sell their land to pay property taxes.

Right, it would be a huge land grab by the rich and connected who could influence valuations forcing many "land rich, cash poor" Thais to sell at fire sale prices. Then where would these people go exactly?

Lots of Thais in urban areas run small businesses or are retired and own shop houses or land worth millions.

Small shop house B5,000,000 x 1.5% = B75,000 per year. People are smoking crack if they think this would not be an insurmountable financial burden to many.

I actually prefer the Thai tax system. Tax imports. Tax big companies. Tax consumption. Tax high wage earners. And for the most part leave everyone else alone. When America used to follow similar policies it was the booming manufacturing center of the world. Now, not so much following the policies most are advocating here.

[CTM]

Wasn't it Warren Buffet (spelling?) who said the US tax system is all screwed up when, as is the case, he is paying a lower percentage income tax than his seccretary?

didn't you know?? It is only socialism if you tax the rich....

But raising /maintaining proportionally higher taxes for middle income earners to subsidise tax cuts and other tax minimisation vehicles for the wealthy, well thats just good old capitalism.

Government involvement? Socialism if you are trying to fund health care, though not refused if you are a bank deemed to big to fail.

It is ok to have the greater society pick up the bill for corporate losses due to fraud, corruption, incompetence, and excessive risk taking. That be capitalism at its finest.

[brahmburgers]

I read today in the Nation newspaper that property taxes will get instated in Thailand. About time.

It looks like farmers will get a break, as will small parcels. ....and absentee owners with large properties will have to pony something up each year. It will piss them off, after having had a free ride for so long, but it sounds like a good plan overall.

[ding]

Hmm....this is reality. Say that reasonable property or other taxes are implemented. What is the likelihood that the money would actually be used by government officials for the benefit of the public, as opposed to say be embezzled or otherwise misappropriated? Really? Honestly??

I am OK with Thailand. The government offers virtually no public services/benefits. But you don't pay either. In Europe, you pay high taxes, but you get great benefits (like free health care, education, good disability benefits). In the U.S. you pay lots of taxes, and don't get squat for it.

Bingo.

and now for the hangover and clean up.