Now that I have had a closer look at the whole income tax chart, I decided to crunch some numbers. Which is strange since I am trained in history and poli sci. The findings are interesting. (Chart taken from www.salary.sg)
Ignore the next paragraph if you don’t care for the mechanics and calculations and just want to look at my conclusions from number crunching.
Based on the graph if you take home $50,000 annually (which is decent and middle class) and you manage to claw your way to $100,000 take home annually, your tax rate increases from 3.5% ($1,750) to 7.1% ($7,100). That’s a 3.6% rise in your taxes. You’re also paying $5,350 more in taxes, which is 10.7% of your extra $50,000. If you start off at $200,000 take home annually, your tax rate is 11.15% ($22,300). If you get a raise to $250,000 take home annually, your tax rate increases to 12.32%($30,800). That’s a 1.17% increase in your tax rate, and a real increase of $8,500. Or a 17% increase over your extra $50,000. Now if you start off at $350,000, you get taxed 13.91% ($48,700), and you take home $400,000 eventually, your new tax rate is 14.68% ($58,700). Your tax rate increase is 0.77% and your real increase is $10,000. That’s a 20% increase over your extra $50,000. If you start at $500,000, you pay 15.74% ($78,700) and at $550,000 you pay 16.13% ($88,700). This is an increase of 0.39% and a real increase of $11,000 and 22% of the extra $50,000. At $650,000 you pay 16.72% ($108,700) and at $700,000 you pay 16.96% ($118,700). That’s a rate increase of 0.24% and a real increase of $10,000 or 20% of the extra $50,000. It kinda levels off at this point the person paying $10,000 extra with each $50,000 increment.
Basically what this means is that once you pass $550,000 annual take home pay, also if you earn between $350,000 and $500,000, you will be paying $10,000 for every $50,000 increase. Or $0.20 of every dollar earned will go to the government. So while the rate of taxation looks like it levels off as the income increases, those who earn less that $350,000 will pay less than $0.20 for each dollar earned. Those who earn between $500,000 and $550,000 will pay $0.22/ $1 earned. Some sort of anomaly in the taxation process.
Hmmm… If I ever earn more than $350,000 (BIG IF) I’ll be paying $0.20/$1 earned. That’s 1 packet of tissue paper I lose to chope seats during lunch hour. So Mr IRAS can I pay you in tissue paper packets when I get a raise beyond $350,000? So like if I get a $10,000 pay raise can I buy you 10,000 packets of tissue paper and drop it off at your Novena office? I am sure your various workers can use it to chope seats at Velocity’s food court. See I’m doing my bit to make civil servants’ lives easier (Ed: I thought they were the servants… only in Singapore).
