‘Robin Hood’ inappropriate description of Budget 2015

Some observers were quick to call Budget 2015 a Robin Hood budget because of a more progressive income tax wherein the top marginal tax rate was raised from 20 to 22 per cent.

That was a misnomer for the pragmatic move to strengthen Singapore’s collective responsibility and drive towards a more inclusive society as the population ages fast.

The legendary Robin Hood was believed to have robbed the rich, mainly the landlords of all the agricultural land, to give to the poor in Nottinghamshire, England, in the 14th century amid the strife of a feudal system.

As an outlaw, he tried to perform what modern government does through social transfers via income tax and redistribution.

While high-income earners may become rich, not all who are rich earn high incomes. Singapore has more than 100,000 millionaires and is one of the top five cities with the highest concentration of ultra-high-net-worth individuals.

The hike in personal income tax may not affect the rich, as widely thought, unless they are high-income earners too, so “Robin Hood” is not appropriate here.

Some also labelled the Government as left-leaning and more socialist, which misses the point that it is trying to adapt policies to our changing demographics and the changing times. Money is needed to fund the higher social spending.

After 2002, we slashed the top marginal tax rate from 26 to 20 per cent over a three-year period; the current hike represents a partial reversal of that sharp reduction. In 2008, estate duty was abolished.

There is also no capital gains tax here. And interest earned on deposits with approved institutions and debt securities are not taxable. Hence, there is no “robbing” the rich per se.

There is only a slight tweak to rebalance the fiscal budget without affecting our global competitiveness and talent attraction.

Were it a so-called Robin Hood budget, other taxes would have been introduced to cast a wider net over non-remuneration income.