I was somewhat bemused by something DPM Lawrence Wong said, about the lower burden of taxation, in his roundup speech to #Budget2023. He showed, with charts, that the tax burden faced by our middle class was lower than elsewhere. (1/n)
He also said that Singaporeans enjoy a much higher quality of public service than elsewhere, for what they pay. There’s a certain truth to that; our public sector, insofar as efficiency is concerned, is pretty value-for-money. (2/n)
Why then do our middle classes feel so aggrieved and embattled? Are we spoiled complainers, ungrateful for the how good we have going? Or is there something about our lived experience that speaks to a greater truth? (3/n)
Look, there isn’t any magic when it comes to public services. If we want to pay less on taxes, we’ll either have to accept lower quality, or less coverage, or longer waits. Some of it may be offset by high efficiency, but such gains can only go so far. (4/n)
Or we pay, through other means. So when we make the claim that we are paying low taxes and yet have a world-class educational outcomes, it shouldn’t surprise us that we are making it up with private tuition spending due to oversized classes. (5/n)
Or that our public hospitals—while still endowed with some of the best equipment and amazing doctors—require our patients to endure long waiting times. Or that our social security system cuts families off at unbearably low levels of income (look for find us in the chart). (6/n)
We also pay via fees and charges, both real and hidden. We have among the most sophisticated systems in the world for charging for road usage, and owning a car is 3 to 4 times more expensive than elsewhere in the world. (7/n)
Our public housing embeds land costs, which can get inflated, and runs the risk of adding to an already-unbearable cost of living. HDB grants offset some of this burden, but it’s unclear whether these go disproportionately toward those who need help the most. (8/n)
Singaporeans intuitively understand this. That’s why there was a meme going around after #Budget2023 was announced, about how salaries seem to go from a lush lamb to a skeletal tulang when all is said and done (H/T: Singapore Laughs). (9/n)
One may still argue that this is actually better. After all, this approach means that those who actually use public goods and services more end up paying more. It is, undeniably, more efficient. But is it fair or just? (10/n)
Much like how consumption taxes like GST are more efficient but typically also more regressive, the entire system can feel stacked against the less-fortunate, as well as the middle classes, who have less support for such costly “indirect taxes.” (11/n)
(Indirect taxes are in quotes because, strictly speaking, they are avoidable—so, not quite a “tax”—but we nevertheless feel compelled to pay, in order to keep up. No prizes for guessing which socioeconomic class often “chooses” not to pay). (12/n)
It also puts us in a constant state of pressure. We are constantly being “tested” on our choices, and expend cognitive energy figuring out whether we want to drive/park at this time or not, to choose this health plan or that, or which subjects merit extra tuition. (13/n)
I’m not saying that we shouldn’t be mindful about how we spend our money. All I’m saying is that, truly, there isn’t any free lunch. We can’t really claim that we’ve a low tax burden—see!—so we must be well off, when we’re also being squeezed in so many other ways. (14/n)
In the end, we’ll have to decide, as a society, what we want: a low-tax regime where we pay more indirectly (and complain alot about charges), or a higher-tax one (which we’ll inevitably complain about), where government can direct spending in even more progressive ways. (15/n)
Regardless, the most important thing is to be clear-eyed about the realities of what tradeoffs are being made, so that we can be more informed when we engage in public policy debates. #makingyourvotecount (n/n)
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As an educator and lifelong learner myself, I really buy into the idea of reskilling and continuous education. So it is unsurprising that I support the general thrust of the SkillsFuture program. (1/n)
Where I have more quibbles is in its execution, which is also informed by my background and experience in the education sector. A big part of the problem is the sort of retraining on offer. (2/n)
What’s there isn’t necessarily bad. I’ve heard complaints about some are using their credits for seemingly-useless courses like flower arrangement or sake tasting; but truth be told, these could springboard career changes, and we shouldn’t preemptively rule them out. (3/n)
When I first arrived in the United States for my doctoral studies, I was shocked at how expensive mandatory healthcare insurance was. At several thousand a year, it seemed a lot more expensive than the twenty or thirty dollars we’d pay when we saw our doctor. (1/n)
Plus, I was 25. I would go to the doctor maybe twice a year, if even that often (remember when you were that invincible?). I thought that U.S. healthcare was just an unfair tax on the young and healthy, a reflection of the overall poor health of the American population. (2/n)
I’ve since learned that, all things considered, the couple thousand bucks was a pretty decent deal. Insurance covered visits to the dentist and eye doctor, plus routine care. And if I was admitted to hospital, the out-of-pocket expenses, while high, wouldn’t break the bank. (3/n)
The idea of trusts and foundations may conjure up images of rich people and their lofty estates, and seems to be far removed from the everyday concerns of most Singaporeans. (1/n)
But the truth is, most of us have encountered trusts in some form. We donate to charities, which is a type of trust. We nominate beneficiaries for insurance or CPF, both of which are trust arrangements. (2/n)
And if you invest, you may have purchased a share in a unit trust, or a real estate investment trust (or REIT). So in reality, most of us have at least a passing familiarity with what a trust is, and how they play a role in our lives. (3/n)
Inflation, as understood by economists, is the rate of change in prices. When prices rise, stuff gets more expensive. This is what is happening across the world now, as well as in Singapore. (1/n)
But one-off price increases, while unpleasant, do not give rise to inflation. Inflation happens when price rises are persistent. Many economists, while worried about inflation, do not expect it to persist beyond this year or next. (2/n)
Yet even when this inflation storm passes, not everyone will be made whole. For many Singaporeans, inflation is not just an inconvenience. If salaries don’t increase to offset higher prices, the current episode will quickly morph into cost-of-living crisis. (3/n)
At the commencement of this session of Parliament, Prime Minister Lee expressed his hope that, with a more sizable Opposition, there would be more sophisticated policy debate, with alternatives instead of just objections being offered. (1/n)
My #workersparty colleagues and I took that charge seriously. So when the GST hike was proposed, we took pen to paper, and worked out a range of revenue options that we felt could stave off the need to raise GST. (2/n)
By our estimates, the hole that GST would fill is around $3.6 billion. So we went ahead and worked out four different ways—we call these levers—that we could pull in more revenue, each built around a different theme. (3/n)
In January’s Parliamentary sitting, members debated the transition toward a green economy. It will also feature in the budget and Committee of Supply debates, currently ongoing. The issue is urgent and important, not least because steps need to taken today to get us there. (1/n)
I’m not usually a Debbie Downer, but my contributions to the debate were mostly cautionary. I spoke about the importance of measuring progress, and warned about how green financing wasn’t some magic bullet, as well as risks from greenwashing. (2/n)
We’ve heard about how the financial sector can make a massive difference to getting us to the promised land of limiting climate change. Of course, finance is important (I teach, research, and practice it, after all!) but not quite sufficient. (3/n)