Wealth tax - use 'shock therapy' cautiously

THIS WEEK'S TOPIC: Should Singapore enhance its wealth taxes (for instance, with a levy on property gains or inheritance) to narrow the wealth gap?

Lawrence Loh Director, Centre for Governance and Sustainability NUS Business School

There are merits for a wealth tax. It is a fast way to redress the disparity between the rich and the less endowed. It is, in fact, a ''shock therapy'' that may expedite the desired outcomes. However, a careful balance must be struck as capital or even talent flight might occur. As in corporate taxation, assets can easily beat a path to tax havens globally. We may end up winning a battle but losing the war on economic opportunity multiplication. More fundamentally, we should not erode the meritocratic underpinning of incentive - we should level up and not level down. Equity is a noble social objective but this cannot be distracted by envy.