Not beneficial to tax the rich too much

In Singapore, the rich are already paying higher income tax (Raising taxes not a bad idea, by Dr Ooi Can Seng; Nov 24).

Our system is based on a progressive tax rate, with income tax rates ranging from zero per cent to 22 per cent, according to the individual's earnings.

This works to reduce the inequality of income, preventing social stratification which is harmful to Singapore.

However, raising tax for higher earners even more could be counterproductive and could worsen many problems it is supposed to solve.

An increase that is too high, too fast and too relentless may act as a disincentive for the wealthy.

The most talented people will leave the country and move to another country with lower taxes if they feel that their efforts are not being rewarded sufficiently.

That will stifle our economy, providing a disincentive for investment, hard work and innovation.

We must tread carefully.

The rich are not there to plug numbers, neither are they an ATM.

If the rich find themselves paying an increasing share of the tax bill, they may come to resent the poor and middle class.

This is socially divisive and would encourage a class war.

Singapore is a society based on merit, and rewards individuals for their efforts.

If we want to have successful entrepreneurs, then we have to accept a greater income disparity between the successful and not-so-successful.

We want to create a fair and equal society, but no country can be completely egalitarian.

Francis Cheng

A version of this article appeared in the print edition of The Straits Times on November 30, 2017, with the headline 'Not beneficial to tax the rich too much'. Print Edition | Subscribe