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Serious The curious case of missing wealth taxes in Singapore

Confuseous

Alfrescian (Inf)
Asset
#1
It should come as no surprise to anyone that the Budget Statement of 2019 did not introduce any new taxes on wealth in Singapore nor raise the rates of the few existing wealth taxes.

We should also not be surprised if no Member of Parliament suggests raising taxes on wealth in the budget debate to follow. This is an indication of how dominant or hegemonic Singapore's pro-capital stance is — that even in a Budget that is presented as a socially progressive one, no one is likely to question the low taxes on wealth.

The missing debate on wealth taxes is not just curious, it is also unhealthy.

As Singapore ages and if economic growth slows, wealth inequality will become more pronounced even as the demands on social spending rise. It is therefore important to consider whether and how wealth in Singapore should be taxed.

WHY TAXING WEALTH MAKE ECONOMIC SENSE
As the Paris School of Economics’ Thomas Piketty has explained, differences in wealth is a greater source of inequality than differences in labour income.

Wealth comes from the ownership of capital, i.e. financial and physical assets. As ownership of capital is far more unequally distributed than labour, the former is a bigger determinant of inequality.

In Capital in the 21st Century, Professor Piketty also observed that except in times of war and depression, the annual rate of return on capital has averaged nearly 5 per cent.

In mature economies, labour incomes are increasing at a much slower rate mainly because growth in these economies is well below 5 per cent.

Inequality, Professor Piketty posits, rises when the rate of return on capital exceeds the growth rate of the economy.

Singapore is now growing at below 5 per cent, even as we expect the return on capital to be close to its historical average of 4-5 per cent. If we care about rising inequality at all, we should be taxing wealth — and therefore capital income — more.

Second, the ratio of capital income — that is, capital gains, dividends, interest and rental income — to labour income increases exponentially as one gets closer to the super-rich (e.g. the top 1 per cent) in the income distribution.

In Singapore, capital is taxed very lightly: there is no capital gains tax or inheritance tax; dividend and interest income are also exempt from personal income tax. Property taxes are relatively low, and only rental income is taxed at one's marginal tax rate.

Given that the rich derive a significantly larger share of their income from capital, the very low taxes on capital in Singapore means that capital owners may be paying a lower effective tax rate than the (upper) middle class whose main (if not only) source of income is their labour.


https://www.todayonline.com/commentary/curious-case-missing-wealth-taxes-singapore
 

laksaboy

Alfrescian (Inf)
Asset
#2
It makes no sense to tax the rich. The truly rich ones (not the upper middle class poseur wannabes) can just park their wealth overseas e.g. the Cayman Islands, and there's not a damn thing you can do about it.

Beware the talk of 'taxing the rich' or 'taxing the 1%' or 'making the rich pay their fair share of taxes'... peel away at the layers, and it's nothing more than the good old Bolshevik commie class envy nonsense.
 

congo9

Alfrescian
Loyal
#4
Rich stay here because it is clean, green, safe and efficient. The rich stay here for they are able to travel in and out freely. Send in their money freely into and out of Singapore without being asked pesky question. Here you can freely hire your own people to work from your own country with a pittance for government created a work visa where you can exploit easily. You can also hire cheap labor readily n easily. A graduate starting pay might be $3000,but you can hire a Indian to work for you at half the price or even 1/3 of it. 1st world Infrastructure with 3rd world pay. Who say they are really less talented then local. But rather, will they be able to create value down the line matter for you and your business. If you'd are not happy, you can sack them easily and replace him with another Indian for they do not have a pesky union to back them up.

So to say that the current MIW minister make Singapore a good place to live and work in is actually half the story. All they need to do is to create a business friendly environment, of course couple with low tax rates environment. It's really no Brainer.

Singapore does not have deep capability in the people, do not have sizeable market, no resources, no technology and no big MNC on our own. How do Singapore create and retain it wealth? By creating a place wherby rich will actually come in here and park their money.
 
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syed putra

Alfrescian
Loyal
#5
Singapore economy dependant on attracting the rich. If they flee, then problem.
This of course cause problems for neighbouring countries as their rich park their wealth here from income earned back home. They set up trading companies selling whatever products they extract in their homeland remitting only the working capital and register their profit here.
Sinkie is like a huge vaccum cleaner sucking their wealth.
 

congo9

Alfrescian
Loyal
#6
No wonder we need 15 billion of defence budget and this sum is 2x more then Thailand put together. If ever other country come demanding this big vacuum cleaner to stop sucking and spit everything out, then our F-35 and submarine will comes in handy.
 
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