Government wants wealth tax in principle, but ‘very hard’ to implement: PM Lee
He said that governments had tried to do so in different ways but failed.
- The Government wants to tax the wealthy but it is very hard to do so in forms other than property tax, PM Lee Hsien Loong said
- He was speaking at a dialogue organised by Bloomberg on Nov 17
- The dialogue covered several topics including big-power rivalry and Singapore’s approach to Covid-19
- The Covid-19 task force's leaders are not there as a “beauty contest” but because they can make important contributions, Mr Lee said
- He also pointed out that the Government’s current Covid-19 approach is to let cases rise but to keep vulnerable people safe
While the Government wants to tax the wealthy in principle, it is “very hard” to do so in forms other than property taxes, Prime Minister Lee Hsien Loong said on Wednesday (Nov 17).
To this end, the Government will need to find a tax system that is progressive and “people will accept as fair”, he added.
Mr Lee was speaking at the Bloomberg New Economy Forum at Capella Singapore hotel in Sentosa and taking part in a moderated dialogue with Mr John Micklethwait, the editor-in-chief of American media company Bloomberg.
The dialogue covered several topics, including Singapore’s approach to taxing the wealthy, relations between the United States and China, and Singapore’s approach to Covid-19.
Elaborating on the difficulty of implementing a wealth tax, Mr Lee said that governments had tried to do so in different ways but failed.
“People have tried capital gains taxes, but that has some downsides. People have tried other forms of direct wealth taxation, (where) I assess how rich you are and knock off a certain percentage.
“It’s not so easy to implement,” he said.
And while income inequality is easier to see and measure, wealth is “much more difficult” as it can pop out in different forms such as the bitcoin, a type of cryptocurrency, and non-fungible tokens.
Nevertheless, the Government here wants each generation to start off from as equal a starting point as possible and will look to implement a system that is fair, Mr Lee said.
In this system, everybody needs to pay, but those who are able to pay more should bear a larger burden of the tax.
Referring to comments Mr Lee had made in the same forum last year, Mr Micklethwait asked if Mr Lee believed that recent events between the two superpowers had amounted to a truce.
The US and China had agreed to boost their co-operation on climate change over the next decade following a climate summit in Glasgow, Scotland last week. The presidents of both countries had also conducted a virtual summit on Wednesday.
To this, Mr Lee said that it is “a necessary beginning” but the differences between the two “are many and deep” and cannot be resolved over one meeting or deal.
Mr Lee also said that the world should be concerned about the “delicate situation” in Taiwan, which China claims as its own.
Although the various parties — China, Taiwan and the US — are “saying the right things” to keep the peace, it is “not a static situation” on the ground, Mr Lee said.
The Americans have significantly increased its military and diplomatic engagements with Taiwan, while the Chinese have been testing Taiwan’s defences by flying into its air defence identification zone almost daily.
The current Taiwanese administration has also disavowed the 1992 Consensus, where China and Taiwan have their own interpretations of the “One China” policy, and is taking other steps to assert its independence such as printing passports that say “Taiwan passport”.
“All these moves raise suspicions, tensions and anxieties, and makes it more likely that a mishap or miscalculation can happen,” Mr Lee said.
Commenting on Hong Kong, another Chinese territory, Mr Lee said that there is “a price that has been paid internationally, and even internally in Hong Kong” following Beijing’s crackdown.
It passed sweeping national security laws and quashed pro-democracy activists in Hong Kong last year.
Mr Lee said that Beijing will see “how things evolve from there” but he did not believe that they wanted to make Hong Kong the same as any other of China’s prosperous cities.
Turning to the topic of Mr Lee’s successor, Mr Micklethwait noted that two potential candidates — Mr Lawrence Wong and Mr Ong Ye Kung — have been placed on Singapore’s Covid-19 task force. Mr Micklethwait then asked if Mr Lee was thinking of “eliminating them or continuing” like in the popular Netflix series Squid Game.
In response, Mr Lee pointed out that the co-chairpersons of the national Covid-19 task force were not put there “as a beauty contest” but because they can make a contribution to an important job.
He said that the Government’s approach is not to write off any participants because it does not have “spare”.
Mr Lee added that he is “not looking for a winner” but trying to build a team of different people and skills to take Singapore into the next generation.
SINGAPORE’S COVID-19 STRATEGY
Addressing questions on Singapore’s Covid-19 approach, Mr Lee said that the country was trying to reach the end point of the pandemic without having to pay the “high price” like other countries had, with their populations getting infected before they were vaccinated.
The Government had hoped that there would be herd immunity after nearly everybody got vaccinated, but the Delta variant of the coronavirus has resulted in many people getting infected, Mr Lee said.
Although this situation is fine for young people, there is a significant portion — 61,000 people — who are aged 60 and above who are not vaccinated, he noted.
However, Mr Lee said that he could not “just write them off” because this group has relatives and friends, and there is a human cost if he did.
The Government also has to keep up with the changing situations during the pandemic, he added.
For example, it started off its approach by doing contact tracing to reduce the number of Covid-19 cases to zero but now it is not doing so.
Mr Lee said: ”Now I am saying, let the cases go but let us keep the vulnerable people safe.”
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