April 22, 2005

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Why Hong Kongers pay too much tax

1. The SCMP reports on the hastily drafted ammendments to the Chief Executive law:

Opposition lawmakers have accused the government of creating a legal mess that could see two chief executives elected, for different terms, within 15 days of each other. Officials conceded that such an outcome - although highly unlikely - could actually occur, and was in keeping with the law, however irrational it might seem.
Nothing another interpretation cannot fix.

2. The SCMP also reportsd on the testimony of Raymond So Wai-man, associate professor of finance at the Chinese University, on how the owner of the Eastern Tunnel calculates its return on equity. The prof sees a much higher return on equity than the company, even though he did not know how the company had calculated its return, and that he had never heard of the term "internal rate of return on equity*". Google returns 2,130,000 entries on the subject. It is taught in every elementary finance subject. Except perhaps at Chinese University.

3. The SCMP in an otherwise pointless magazine called FACES interviews Liberal Party leader James Tien about his cars. Remember this is the leader of one of Hong Kong's major political parties. He proudly poses in front of his Ferrari and Porsche, with the Bentley, Audi, Nissan SUV and other Porsche. Excerpts of the interview below the fold. I couldn't make this up if I tried.

Where else in the world could a leading politician have an interview where he boasts about his wealth, his cars and his charmed life?

* IRR is the discount rate where the present value of future cashflows from an investment equal the costs of that investment i.e. the discount rate needed to make the present value of those future cashflows zero. It is effectively the yield of that investment.

James Tien Pei-chun, the 58-year-old chairman of the Liberal Party, legislator and chairman of the Manhattan group of companies, has owned four Ferraris, the entire line of Mercedes-Nenz S Class models and more Porsches than he can recall, not to mention a few Jags and Bentleys...

What cars do you now own?

I have 6 cars. A turbo-charged Bentley Arnage, which is two years old. An Audi S3, the 2005 model...a mutlipurpose vehicle, a Nissan Elgrand...These 3 cars are usually taken care of by my driver. The cars I drive myself are a Ferrari 360 Modena, a Porsche 911 Turbo and a Porsche Carrera S.

Do you worry that your sports cars give people the wrong impression of you? [Ed.- it's hard to see how. This is Mr. 1% we're talking about.]

People generally think one of two things when they see a driver in a sports car. That they either like to drive recklessly or that they want to show off their wealth. But that's never bothered me. Also, I'm not a grassroots politician. If I was a grassroots politician, driving a sports car might raise eyebrows and suspicions of corruption. But as a legislator coming from a business background, I don't think people mind what I drive. [Ed. - interesting how he didn't answer his own question about what kind of driver he is.]

posted by Simon on 04.22.05 at 12:14 PM in the




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additional poll results from HKU on whether hongkongers think the tax system is fair:
57% say "fair" and 30% say "unfair"
http://hkupop.hku.hk/english/release/release284.html

posted by: eswn on 04.22.05 at 01:28 PM [permalink]




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