Should Singapore adopt a wealth tax

There was a piece in Todayonline by former AO, and current academic, Donald Low, which suggests that it may be time for Singapore to consider implementing a wealth tax.

As I understand it, wealth tax may include taxes on capital gains, dividend income, and/or inheritance.

Such a wealth tax, if applied, would surely adversely affect a significant fraction of the FIRE community, many of whom rely on dividend income as the primary pillar of their FIRE plan.

I must say I do not quite understand the rationale for such a tax. The primary goal of such a tax appears to be purely borne of a desire for contrived wealth redistribution, which unduly punishes the owners of capital.

It is as if the word "capital" itself has acquired a dirty, unsavory connotation, which people associate with "sloth", and "undeserving".  People tend to forget how owners of capital came to be in the first place.

Barring a healthy inheritance, I would argue that most members of the FIRE community came into substantial amounts of capital through a combination of:

hard work (to increase earned income),
thrift (to reduce expenses),
prudence (to increase savings) and
meticulous planning (to craft an investment portfolio).

To penalize one for possessing these attributes seems self-evidently absurd.

Furthermore, their source of accumulated capital is primarily from active earned income, which is already subject to income tax.  Indeed, the individual looking to achieve FIRE is often a high income earner, which means he/she already pays a disproportionately high amount of income tax relative to the average taxpayer.  Therefore, to even imply that it is "unfair" that capital is not taxed requires a feat of mental gymnastics and a blatant disregard of reality. 

Additionally, persons who derive income from capital in retirement are also the demographic least likely to require Government aid, whether in the form of GST vouchers, CHAS subsidies or CPF top-ups.  If anything, we should be encouraging more Singaporeans to delay gratification and accumulate capital, to lessen the burden on future taxpayers  (i.e., your kids and grandkids).

In the words of a particularly cringey  NTUC Income video ad, the best gift for your child is your own retirement plan.  Indeed, we should be incentivising behavior that promotes self-reliance and financial independence in old age.  A wealth tax achieves the exact opposite.

Not to mention, our Government is clearly not in need of revenue, having declared years and years of surpluses without including land sales revenue. Incidentally, it is interesting to note that the G is able to continually operate with surpluses because of the NIRC - income derived from capital held by Temasek/GIC.  Let's not make capital a dirty word.