Beware 'class warfare' approach to taxes

Imposing more taxes on the rich ends up hurting the middle class

Capital gains and inheritance tax proposals are political crowd-pleasers because many believe they are targeted only at wealthier taxpayers, say the writers. But they add that this overlooks the fact that higher tax rates don't raise as much money as
Capital gains and inheritance tax proposals are political crowd-pleasers because many believe they are targeted only at wealthier taxpayers, say the writers. But they add that this overlooks the fact that higher tax rates don't raise as much money as initially expected because taxpayers have less incentive to earn (and report) income. ST PHOTO: KUA CHEE SIONG
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Singapore is one of the world's most impressive economic success stories. Decades of strong growth produced economic convergence with rich nations in North America and Western Europe. Given how few nations have made that jump, this is a remarkable achievement.

What's even more noteworthy is that Singapore's economy then continued to expand at a healthy pace. Based on measures such as per-capita economic output, residents of Singapore are now significantly better off than their counterparts in almost every nation in the so-called rich man's club of the Organisation for Economic Cooperation and Development (OECD).

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A version of this article appeared in the print edition of The Straits Times on April 11, 2019, with the headline Beware 'class warfare' approach to taxes. Subscribe