Saturday 21 September 2013

Personal Exertion, Capital Gains and Corruption

Personal exertion, capital gains and corruption, what do they have in common? They enable people to obtain or generate wealth, legally or otherwise. Personal exertion is about generation wealth through personal efforts, physically or through our brain power. 

One could also gain wealth through capital gains where the returns come from the investment we make such as when the house we own goes up in value and we capture the value through sales. Another example is when we buy and sell shares, whenever the amount sold exceeds the cost of buying the shares then a capital gain is made.

Corruption is a straight forward criminal act. This is when somebody with certain power get paid to exercise the power in favour of the payer. However, many people who are involved in this despicable act may not necessarily agree with this statement. Some may argue that corruption is their birthrights and enshrined in the constitution, while others would justify such acts using higher causes such as to level the playing field. Many Muslims in this country will be outrages whenever there is an accusation about certain food sold in the market is doubtful in terms of its Halal status. However, the same people may not be worried about engaging in the acts of corruption and use the ill gotten wealth to feed their flesh and blood.

So much about the definition, why are we discussing this issue here. Well, in the past few months, many people are discussing about distribution of income. Many solutions have been explored and considered. We may see some new initiatives being introduced soon, perhaps. Let us step back and see how many of those in the low income category are able to consider one of the above means to earn their living.

If they do not have money to invest, capital gain will not be viable option. If they do not have the power to abuse, they can't even be corrupt although out of desperation they may be tempted to sell their soles to the devil. The only possible way for them to make money is through personal exertion. 

Those who have wealth will have more opportunity to rely on capital gains. They can invest in property or stocks and many had made millions out of these activities.

While personal exertion would expose the income to taxation, most of the capital gains are free of tax. This is where our system may not favour those who has less wealth. The smarter of the capitalists will structure their investments so that most returns would be capital in nature, thus reducing their tax exposure. 

If we are really serious about wealth distribution, capital gains tax, whether on property or financial assets could be a viable option. This would certainly be very unpopular to the wealthy as their main sources of wealth will be exposed to taxation, and the amount could be very large! They have the means to raise their views to the media and could use their wealth to lobby. Realistically, in an environment where those in leadership are scared to make right decisions, this option is highly impossible.

What about the crooks? Are they in the scheme of thing in re-distributing wealth? Yes, just put as many of them in prison. The amount of corruption will automatically be reduced and wealth will be channeled back into the formal system and will be available for the honest citizens to capture. How much is this possible? I am sure you will be smiling when this option is proposed.

Hope the above will provide us with some idea about possibilities in wealth re-distribution. Have a great weekend.

Saturday 14 September 2013

Redang, in pictures

Redang is an island located off the coast of Terengganu. It is accessible through boat from Merang or from the air by using Berjaya Air which flies from Subang.

Famous for its nice beaches and marine life, Redang is a very nice place to relax and have a break from our busy schedule.

Small boats at the Merang jetty
People jogging along the beach as the sun was setting

Tourists and the school of fish at the marine park
Boats harboured off the beach
One of the resorts in Redang
A bird looking for an early breakfast

Saturday 7 September 2013

Redang, a re-visit

I was a scuba diver. In the Malaysian peninsular, the best dive sites are located around the many islands on the East Coast, Redang is one of them.

The whole island is a designated marine park. It is illegal to disturb the marine life here. One may be fined or even jailed, although it is unheard of that anybody is subjected to such penalty.

My visit to the Penang island marine park was rather disappointing. I was there twice when I was diving. There were many life corals around the park. There were not there today. While there were many variety of fish, most of there corals were dead. What went wrong? Too many visitors as such that the ecosystem was not sustainable? Lack of enforcement?

While there are many resorts around the island, the real treasure of Redang is its marine life. While it is easier to build nice buildings which accommodate the needs of visitors and tourists, the maintenance of its marine life is harder. Tourists who are not sensitive towards marine life sustainability may just walk on the corals, destroying the fragile creature which takes years to rebuild.

Sustainability is something which is yet to be the mainstream consideration in our society. Which we may have heard the wors being mentioned by many people, how many of us are really living in a sustainable way? How many plastic baga do we use weekly? That is just a simple indicator of how much we walk the talk. 

How much we had adjusted our lifestyles to conserve water? I always feel sad watching fellow Muslims performing their ablution. The amount of water used does not reflect the teaching of Prophet Muhammad who advised Muslims to conserve water while performing ablution even when it was performed at a running river.

Well, we only have this planet and there is no replacement available if we mess up this one. My return to Redang reminded me the importance of sustainability. I hope this thoughts is shared by many of us out there.