Some people argued that low taxes are needed to attract people into Singapore to create wealth and provide employment for the people.
Do not be fooled by this argument. Let us look at the facts.
The two sectors that created the most wealth and employment in Singapore were the banking and property sectors. These sectors generated huge profits and employed large numbers of people in marketing, sales and the back offices.
They created false wealth by generating a huge bubble in asset prices. Many people thought that they were wealthier when the bubble grew and the prices of their assets inflated. Unfortunately, high property price is really a burden that has to be paid over a lifetime and is a major contributor to the high cost of living in Singapore. The burden is higher for the future generations.
The bubble has now burst and caused the global economic crisis. Singapore has its share of the pain.
There is no point in attracting business into Singapore, through lower taxes, if the outcome is to create false wealth and to leave a heavy burden on future generations.
Tan Kin Lian
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