Why does Singapore give money to residents?

The increase in consumption tax will inevitably increase the consumption burden of residents. To this end, the Singapore government has decided to increase the amount of consumption tax subsidy coupons from the maximum subsidy of S$500 to S$700, and will further increase it to S$850 in 2024. At the same time, special subsidies for living expenses will be provided depending on the tax situation, ranging from S$200 to S$400.

On this basis, the government will also increase the amount of neighborhood shopping vouchers distributed, with each household receiving S$300. In other words, an ordinary Singaporean family can get a maximum of 1,400 Singapore dollars a year, and a minimum of 1,200 Singapore dollars, which is equivalent to 6,000-7,000 yuan in RMB, which can play a very important role in helping residents’ family life. supporting effect. Especially in the face of inflation, these subsidies can better alleviate the pressure that inflation brings to residents' lives. There is a reason why the Singapore government does this.

According to data released by the Monetary Authority of Singapore and the Ministry of Trade and Industry in January, Singapore’s overall inflation rate in 2022 will be 6.1%. It should be said that the inflation rate is not low. If the government does not increase subsidies for households, the low- and middle-income groups will face greater living pressure. Obviously, this is not conducive to social stability and is not good for the people. What is conducive to residents' harmony may even affect residents' trust in the government. Therefore, we must make a positive gesture in this regard to make residents feel that the government cares about them. It is worth noting that when it comes to distributing money to residents in Singapore, the government does not do it "forcibly", nor does the government finance it all. Instead, it solves the problem of distributing money to the poor by increasing taxes on the rich. You must know that if the government simply relies on "hard" issuance, the government's financial resources are limited, and it can only be solved by issuing currency. The result of issuing currency is inflation.

Global inflation has been high in the past two years because of the severe over-issuance of currency in previous years. If we continue to issue money to residents through the issuance of currency, it is tantamount to poaching the flesh to mend the sores, tearing down the east wall to pay for the west wall, and failing to fundamentally solve the problem.

On the contrary, letting the rich pay more taxes can effectively reduce the burden on the government and solve the problem of distributing money to the poor without having to spend more money in their pockets. The government does not need to issue more currency. Naturally, there will be no increase in currency in circulation and no new inflation.

Some people believe that by raising taxes on the rich to solve the problem of giving money to the poor, it will not increase the burden on the government, and it can also better reflect the social wealth distribution. fair. However, for the rich, increasing taxes means increasing burdens and will lead to a reduction in their social wealth. Will this cause the rich to feel dissatisfied and have thoughts about immigration? It would be unrealistic to say there is no such thing. However, not many people have such thoughts. For a considerable number of wealthy people, whether to immigrate or not has little to do with their wealth. Because a moderate tax increase will not have much impact on their wealth. Immigration itself is also risky. Once you choose the wrong place to settle, you may suffer even greater losses.

Singapore’s measures of giving money to the poor and raising taxes on the rich are quite good and should be learned from. In the context of poor economic conditions, difficulties in operating enterprises, high employment pressure on residents, and slowing income growth, it is realistic and can be recognized by the rich to moderately increase taxes on the rich. The poor who receive money will enhance their trust in the government and develop a favorable impression of the rich, thereby weakening the contradiction between the rich and the poor. It can be said that it kills multiple birds with one stone.