One of the things that I have been thinking about a lot since I moved here has been the proper role of government in a society. What should the government be responsible for and what should private companies be responsible for? This has come across my mind a number of times because it is clear that people here conceive of the role of government quite differently here than in the US.
During my first few days here, I immediately noticed the clean, efficient public transportation station, the orderly streets and roads and public facilities. Hong Kong has a number of public parks, swimming pools, sports facilities, libraries and museums throughout the city. They are all fairly new, well maintained and either free or inexpensive. In addition to free primary and secondary education and subsidized healthcare, about 50% of Hong Kong residents receive public housing. HK residents definitely feel entitled to these services as citizens. Housing is a major problem here given that you have seven million people trying to fit into 400 square miles, and it is one that residents think the government should make a concerted effort to solve. (Note: not everyone in this city is a HK resident, I will discuss the differences in a different post) Overall, the rule of law is pretty absolute. Actually, no one breaks the rules…ever. Sometimes I forget that you’re not allowed to eat or drink on the MTR (subway), take a drink from my water bottle, and people stare at me.
At this moment, the rational person is thinking: “woah, how high are their taxes?” Answer: lower than in the US. Hong Kong has a flat tax system. Everyone pays %15 of their income to the government at the end of the year. (It is graduated, so people with extremely low wages pay between 2-10% depending on their wage) Companies pay 17% which they pay before they pay out to their stockholders. There is no Value Added Tax aka tax on consumer goods. However, the government does tax betting and collects money from rent. Interestingly, all land is HK is leased by the government to the owner.
So clearly, there is a way to have a government which functions at a super-high, efficient level without taxing the wazoo out of everyone. I don’t think that the US could copy HK’s system and expect perfect results, but I do think that we need to think about what services our government needs to provide us as citizens and devise a fair way to raise money to fund those operations.