It is refreshing that Ms Denise Phua has called on the Government to tax the rich to fund social spending. She is one of the first PAP Member of Parliament to affirm the SDP’s programme.
In our economic manifesto It’s About You, which we presented to the electorate before the 2011 general elections, as well as our Shadow Budgets 2011 and 2012, we made it clear that the extreme imbalance in wealth in our society necessitated a re-calibration of our tax structure to provide extra revenue for social spending.
We said: “Singapore should bring up its tax bracket for top earners closer to the 30 percent mark like Canada, Germany, Japan, and so on. The increased revenue collected from higher tax rates could go towards funding social programmes such as increasing the Public Assistance Scheme for the poor.”
The current tax rate for individuals in Singapore is capped at 20 percent. This rate has allowed the wealthiest in the country to get richer despite the fact that those earning below $20,000 per annum are not taxed on their income.
In addition, the PAP Government abruptly abolished taxes on estate duty 2008. Inheritances are taxed when individuals die and pass on their possessions. The philosophy behind such a tax is that while society must encourage diligence and enterprise of individuals by allowing them to keep and save as much as they can, recipients of their wealth after they pass away may or may not deserve all the riches.
Such ill-considered policies have caused the present chasm in wealth disparity in our society. The consequences of such inequality, left unremedied, will give rise to grave social and economic problems down the road.
We proposed the reinstatement of the estate duty tax for the wealthiest 20 percent in Singapore, both for citizens and non-citizens. Revenue from such a tax can be used to pay for programmes like retrenchment benefits.
We also repeated in this year’s Shadow Budget what we put forward last year: Increase the GST of luxury goods to 10 percent and levy a property sales tax on non-resident foreign buyers of our property.
During the GE, however, the PAP attacked us for proposing such measures. Now, one of their own MPs has echoed our view. We welcome the support.
This is not the first time that the PAP has followed the SDP’s lead. Ms Josephime Teo echoed our call for the reduction of foreign workers in Singapore, Mr Inderjit Singh followed our stance on reducing ERP rates and maid levy, and Mr Hri Kumar conducted town hall meetings after we proposed them during GE 2011.
Clearly the Singapore Democrats have been the constructive party.