http://www.tremeritus.com/2015/08/18/tharman-sgs-level-of-inequality-not-particularly-high/
“It’s not just about taxing the rich, it’s the broad middle class in these societies that pay very high consumption and income taxes, to generate the tax revenues which the state uses for redistribution,” Mr Tharman commented.
“The average worker in Denmark pays an income tax of about 36 per cent, and consumption taxes of about 25 per cent. In Finland, there is a somewhat similar consumption tax, about 24 per cent. Even if we look at their discounted VAT tiers – for instance, in Finland, it’s about 14 per cent for food – the average worker pays a lot of taxes.”
He said that PAP Govt’s approach is to keep the overall tax burden low but ensure that the tax revenue is used “in a fair and progressive way by targeting support for the low- and middle-income groups where it helps them most”.
“We keep income taxes for the middle-income and their overall burden of taxes low. Our middle-income households get a fair deal in Singapore,” he emphasized.
“With the enhancements in Budget 2015, they get $2 in government benefits for every $1 of total taxes they pay (including income tax, goods and services tax, property tax and all other taxes) – not bad. In the United Kingdom, it is $1.40 of benefits, and it is slightly lower in Finland. The middle class in these other places get significant benefits, but they pay high taxes.”
Few countries have succeeded in sustaining income growth, tempering inequality and keeping social mobility alive over a long period, he said.
“We must also keep our focus on what matters most to people: having a real chance to develop themselves and move up in life. Focus on maximising opportunities for everyone to do well, and especially for those who start with less. Focus on raising standards of living for all, even as we temper inequalities through redistributing. And we must do so with confidence in ourselves, not thinking there’s only one model to follow,” he added.
“Stay with strategies that are working well, learn from mistakes, keep improving and keep making a better Singapore.”
“It’s not just about taxing the rich, it’s the broad middle class in these societies that pay very high consumption and income taxes, to generate the tax revenues which the state uses for redistribution,” Mr Tharman commented.
“The average worker in Denmark pays an income tax of about 36 per cent, and consumption taxes of about 25 per cent. In Finland, there is a somewhat similar consumption tax, about 24 per cent. Even if we look at their discounted VAT tiers – for instance, in Finland, it’s about 14 per cent for food – the average worker pays a lot of taxes.”
He said that PAP Govt’s approach is to keep the overall tax burden low but ensure that the tax revenue is used “in a fair and progressive way by targeting support for the low- and middle-income groups where it helps them most”.
“We keep income taxes for the middle-income and their overall burden of taxes low. Our middle-income households get a fair deal in Singapore,” he emphasized.
“With the enhancements in Budget 2015, they get $2 in government benefits for every $1 of total taxes they pay (including income tax, goods and services tax, property tax and all other taxes) – not bad. In the United Kingdom, it is $1.40 of benefits, and it is slightly lower in Finland. The middle class in these other places get significant benefits, but they pay high taxes.”
Few countries have succeeded in sustaining income growth, tempering inequality and keeping social mobility alive over a long period, he said.
“We must also keep our focus on what matters most to people: having a real chance to develop themselves and move up in life. Focus on maximising opportunities for everyone to do well, and especially for those who start with less. Focus on raising standards of living for all, even as we temper inequalities through redistributing. And we must do so with confidence in ourselves, not thinking there’s only one model to follow,” he added.
“Stay with strategies that are working well, learn from mistakes, keep improving and keep making a better Singapore.”
