In my article on "extremely high earnings", I described the damage caused to working class families by the extremely high fees charged by medical specialists and lawyers. The level of fees are so high as to be unconscionable, and they do not even assure the clients of success.
There are two ways to controlled these high fees - by imposing control over the fees or by levying a high rate of tax on these incomes. I prefer a high rate of tax, as it is easier to handle rather than levying price controls over all types of professional services.
Some people said that there is a risk of brain drain, i.e. the talented people will go to other countries. This is the argument given by proponents of the low tax and the free market. There is a flaw in this argument - as the high tax is intended to be levied on income derived within the country. How is the brain drain going to occur?
There could be a brain drain in respect of medical specialists treating rich foreigners in Singapore, as the experts can practice in other countries. We have to weigh the economic benefits of treating foreign patients in Singapore with the high fees that are being paid by our locals for these medical services. Looking at the high cost of living and services in Singapore, I prefer that to avoid earning the money from foreigners and to keep the cost of health care at an affordable level.
If we can collect more tax on high incomes, we can do away with GST (goods and services tax) entirely, and not just on essential necessities. Besides being a burden on low income people the GST is a wasteful tax, as it imposes a heavy burden and administrative expenses on businesses to collect the tax, and adds to the overall cost.of doing business.
Tan Kin Lian
"How is the brain drain going to occur?"
ReplyDeleteI think it meant these specialist will leave SG
Attracting more & more of such extremely expensive specialists and lawyers don't benefit the people, as 95% of us can't even afford to hire them in the first place. Their work & contribution are also generally for their own wealth buildup and marketed only at the top 5% of rich people in Singapore. I.e. their contributions are not meant for the wider public. It is similar as encouraging more & more bungalows and $20 million dollar penthouse condos to be built, instead of more HDB flats. Or encouraging more Ferraris and Rolls-Royces to be sold, rather than directing resources to MRT and public transport. How does the common people benefit?
ReplyDeleteHaving more of such expensive types plying their trade in Singapore will simply jack up the overall cost of living. This is becoz such personalities are held up as excellent role models and they set the benchmarks for all other medical doctors and lawyers (as well as other professions, including PAP ministers).
The common people will simply see higher inflation, higher income gap, lower purchasing power. They won't get much benefit from allowing such highly expensive people taking advantage of low-tax havens such as Singapore to rake in their millions.
Dear Mr Tan, I am heartened by your closing remark in "extremely high earnings" that "doctors work for the satisfaction of giving life to people...". Our departure from this shows our moral decadence. We worship money and status above all things else...Are there no other good people to come forward and serve the country for the sake of improving the life of our citizens? It is sad that the so called talented in society are busy amassing for themselves as much money and status as they...And their service can be sustained only by high pays. What shall we do. Mr Tan?
ReplyDeleteThe low income earners don't pay a formal income tax, so the government casts the GST net to bring them to book. This is pure hardship as they live hand-to-mouth, meaning they are taxed on their entire income as soon as it is spent. Even a cup of coffee has a GST component built into its price, only you don't see it. Therefore these people do pay an income tax of 7%, very high for their level of earning.
ReplyDeleteOur leaders' worship of money is also reflected in the giving of "privilege" of naming institutions after once-off highest donors, e.g. of hospitals, ostensibly in the goal of encouraging more donors.
ReplyDeleteI can't agree more. Just my experience:
ReplyDeleteMy wife just gave birth and when going through the breakdown of the bill, I realised that the Gyne's attendance fees for delivering the baby is more than the hospital charges!
In fact, when people say the medical bills are very expensive, it's not the medical charges of the hospital, facilities, expendables and medication that is expensive per say. Those charges, I must agree are priced at a reasonable level. It's the specialist' fees and charges that are very expensive, that causes the entire bill to balloon up!
Not forgetting, we have also been paying bi-weekly bills to the gyne for all the visits running up to the actual delivery. Adding everything up, I see a big hole in my pocket for the little one.
How to have more children like this?