Lim Tean is wrong on progressivity taxation, economics commentator

Prominent socio-economics commentator Chris Kuan has pointed out that (without directly naming him) opposition politician Lim Tean is wrong in his assertion that Singapore came last in Oxfam Inequality Report For Progressivity Of Taxation.

In a post which is trending with over 250 shares on Facebook, Lim claimed that “in the Oxfam report on Governments’ commitment to reducing inequality 2018, the PAP government comes last out of 157 governments when it comes to the progressivity of taxes…This is another instance when the PAP says something in public which is quite different from what it practices.”

He added: “But Singaporeans should not be surprised by now. This is a government that will go out of its way to help the rich and the privileged at the great expense of the rest. As Oxfam noted, Singapore has become a tax haven for the rich.”

Kuan claimed that the Oxfam Inequality Index puts Singapore last in the world for ‘progressivity of taxation’ not because we tax the most, spend the least and horde the most. “Progressivity of taxation has nothing to do with spending and hoarding of revenues – that comes under fiscal policy stance,” he said.

Chris Kuan explained:

“Progressivity of taxation means the increase in tax rates as taxable amounts increased so that a taxpayer’s average tax rate is lower than his marginal tax rate. If Singapore is last in the progressivity of taxation, it means the tax rates are not rising enough as taxable amounts increased and it usually mean relatively low tax rates for the higher income earners in Singapore’s case.”

Kuan asserted that contrary to popular opinion that Singapore does not we tax the most, the right view should be, “we don’t tax enough of the higher earners.”