COE Bidding System can be More Equitable and Earn more Tax Revenue

This came out during a conversation with a friend and i realise there is (too) much room for improvement on the current COE system and car ownership in Singapore. It was a reaction to the Channelnewsasia article about how to review the cost of car ownership

COE System- Pay for What You Bid and Not the Cut Off Price

This was a thought that came to my mind. In the current system, the final price is set at the X highest bid price, where X is the quota for that cycle. Those who bid higher will be reimbursed. This to me seems not optimal. 

A proposal is as follows: Let's say for that month, there are 2,000 quotas. 2,000 will still be allocated to the bidders, but instead of all 2,000 paying the cut off price; the bidding amount each individual submitted will be their final COE price. No reimbursement will be given. This to me is optimal and will allow for a definite bumper in tax revenue (we might not even need to raise 1% more in GST). The additional revenue could be used to fund low income programs and even create a NMP post for me to suggest more efficient policies that can raise the living standards of the middle/low income, I already have 2 schemes in mind :p

A Form of Social Equality Tax, why don't the Government Just Implement it?

For those with more economic resources aka the rich, it is likely they will throw a staggering COE bid to secure their Jaguar/Land Rover/Merc/BMW. So why not take everything and thank them for "Nation Building"? Heck, LTA could even offer an add on service of $1,000 for these crazy rich asians (there are a number of them in Singapore) to print a piece of ordinary A4 paper with LTA logo for them to remember the COE price they paid for a car. Hats up, this might even become a prop for the next Crazy Rich Asian Movie!

This is definitely a form of taxation to be equitable.

Singapoer Management University (SMU) graduates will know this is the current system for the modules they bid. The SMU system has been running for more than 10 years and pherhaps shows how great the university is in being equitable. Maybe that's why SMU has ethics as its core module unlike the other 2 univerisities where most public servants are from :p

There is a second order effect that once such a system is set in, people will be more strategic and prudent. The less crazy rich asians will not be overbidding for a car since they know they donate their entire bidding amount to the State; it gives the middle income families a slightly higher chance of securing a car at a lower COE price point.

Implementing a system to this is easy, just ask SMU and they can port over their system to LTA. It could even be a Final Year Project for their Information Systems student. 

Above is a food for thought, I am not running for general election just thinking on 1 of the many ways to improve our country.