Wealth tax idea worthy of debate
A higher tax on the owners of Singapore's most expensive homes - the top 1 per cent - resonates here because it is aimed at closing a widening income gap, a problem we share. But it has prompted property and tax experts to say it would not work in Hong Kong because our residential property market is different. And if that were not enough to keep the idea off the agenda, they invoked the threat of a wealth tax to Hong Kong's free-market, low-tax image. That said, the wealth gap remains the prime source of social unrest. Singapore's move focuses attention on our top 1 per cent. After all, six of Asia's reputedly 10 richest people live or have close ties in this city. Through disparate acts, tycoons do more to share their wealth than they get credit for. But perceptions can affect social harmony.
Lest there be any doubt that Hong Kong has a growing income gap, the financial secretary dropped another HK$15 billion into the Community Care Fund in his budget this week. This fund was supposed to be a joint venture with tycoons to help the poor with housing, health, welfare and education. The business response was lukewarm, perhaps because tycoons did not want to be seen to be competing for future favours from government. They also said they had set up their own funds.
Nonetheless, the city's leading tycoons are known for generous philanthropy and charity. However, such individual gestures don't address the socio-economic fallout of a widening income gap. The wealthy would get more credit for group sacrifices. Such thinking is partly inspired by news that Henderson Land Development chairman Lee Shau-kee and New World Development chairman Henry Cheng Kar-shun are both considering donating farmland from their companies' land banks for the construction of affordable housing. These again are individual public-spirited acts. At a time when a lot of thought is going into how to close the income gap, the contrast with Singapore springs to mind. The city-state budget that taxed the owners of luxury properties also doubled spending on preschool education - an investment in closing the income gap by trying to give the children of poor families an equal start.
The Singapore way may not be ours, but it does raise the question whether our top tier of wealth or income should be seen to pay more to help bridge inequality. It is a debate in which the wealthy should take part, in the interests of the city in which they prospered.