Singapore — Workers’ Party MP Jamus Lim (Sengkang GRC) proposed a wealth tax of between 0.5 per cent and 2 per cent in a motion in Parliament on Nov 1, followed up by a Facebook post containing his points a few days later.
But perhaps it’s his caption that stands up the most, as he bluntly states that “Secretly, many wish to break into the ranks of the wealthy, too.”
The MP, an Associate Professor in economics at Essec Business School, argued that a wealth tax would result in a decrease in income and wealth inequality as well as diversify sources of revenue for the country.
He argued that “inequality is a real and pressing issue” in Singapore, adding that “we can do more to address our inequality problem.”
And while there were some who responded positively to his motion, many others questioned the points Assoc Prof Lim made, expressing doubt that a wealth tax would reduce inequality and wondering if such a tax would be “fair.”
Others seemed to think that there are better ways to “help the poor.”
The MP seemed to address misgivings about wealth tax in his latest post.
“Wealth is a tricky subject,” he wrote. “At some level, only those with the deepest schadenfreude (locally, we call it chao kuan) would begrudge another’s success, especially when it was hard-earned and deserving.
Secretly, many wish to break into the ranks of the wealthy, too.”
He added that many of the rich have already given to society in terms of quality products and services, and cited companies like Microsoft, Apple, and Nike, saying their products “have made our lives better, and their founders deserve to be rich.”
However, Assoc Prof Lim pointed out that in actuality, society has also contributed to these founders’ success.
“They may have gone to public school. Their businesses may have received public startup funding. These firms also operate in a business ecosystem, with public infrastructure like roads and bridges and power lines, developed financial markets, and rule of law,” he explained, adding that “Taxpayers were the silent investors in companies that succeed.”
Therefore, taxing the wealthy is at some level justified, but how to do so remains the question. And he pointed out that those who are wealthy have the means to avoid taxation.
However, he seemed to be optimistic that “a global agreement on wealth taxes” would emerge soon.
“Tax competition is a model better suited for the last century. Modern, advanced economies already apply a smorgasbord of taxes on wealth, and it won’t be surprising if a global agreement on wealth taxes emerges soon, just like one on the minimum corporate tax. A 21st century wealth tax can be designed to appeal to the philanthropic spirit, while also taking steps to assure the wealthy that their hard-earned fortunes would not be depleted.”