May 7, 2013

Another popular myth about Singapore: welfare spending means higher tax

This myth is popularized by the governing party, the press, and others, locally and internationally, who believe this myth.

Foreign wealth widens inequality in Singapore
"Low tax rate an incentive for foreign investors, but it also means no social protection for city-state's poor."

This article at repeats the popular myth that any increase in welfare spending must come from higher tax.

But, in fact, Singapore is already a welfare state for the rich. Some shifting of welfare from the rich to the poor can be done without any tax change.

There is also a huge annual investment return from Singapore's reserve. The investment returns are not used. A lot more welfare spending can be done by just using a small part of the returns.

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