In Singapore, the government’s priority is to keep taxes on the middle class low in order to encourage work and enterprise. Under what is known as a “progressive” system of taxes and benefits, the rich bear a larger burden of taxes, while those with lower income receive more in social transfers or benefits.
Consistent with this approach, the Ministry of Finance estimates that the bottom 20 per cent of households by income receives around S$4 in benefits for every dollar of tax paid, while the top 20 per cent receive just S$0.30 for every tax dollar.
On the other hand, there are Singaporean who feel that all citizens who contribute to the state’s coffers should be entitled to a range of benefits, and not just limited to public goods such as national security or infrastructure.
Some may feel aggrieved if they are excluded from certain benefits on account of their income or wealth, particularly if they are contributing a significant amount in taxes.
Like wealthy donors at a charity dinner who take pleasure in good food and a door gift, these high-income earners derive satisfaction from receiving vouchers and other Budget goodies, even if these offset only a small fraction of what they pay in taxes.
Singapore’s approach towards social benefits is in fact evolving.
An early foray into universal benefits was the Pioneer Generation Package (PGP), introduced in 2014. The PGP provided a generous package of medical benefits to seniors born in 1949 or earlier, regardless of their income or wealth, to honour these pioneers for their contributions to nation-building in Singapore’s formative years.
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Consistent with this approach, the Ministry of Finance estimates that the bottom 20 per cent of households by income receives around S$4 in benefits for every dollar of tax paid, while the top 20 per cent receive just S$0.30 for every tax dollar.
On the other hand, there are Singaporean who feel that all citizens who contribute to the state’s coffers should be entitled to a range of benefits, and not just limited to public goods such as national security or infrastructure.
Some may feel aggrieved if they are excluded from certain benefits on account of their income or wealth, particularly if they are contributing a significant amount in taxes.
Like wealthy donors at a charity dinner who take pleasure in good food and a door gift, these high-income earners derive satisfaction from receiving vouchers and other Budget goodies, even if these offset only a small fraction of what they pay in taxes.
AN INJECTION OF UNIVERSALISM
Singapore’s approach towards social benefits is in fact evolving.
An early foray into universal benefits was the Pioneer Generation Package (PGP), introduced in 2014. The PGP provided a generous package of medical benefits to seniors born in 1949 or earlier, regardless of their income or wealth, to honour these pioneers for their contributions to nation-building in Singapore’s formative years.
Continue reading...