Extremely high salaries and brain drain

In my article on "extremely high earnings", I described the damage caused to working class families by the extremely high fees charged by medical specialists and lawyers. The level of fees are so high as to be unconscionable, and they do not even assure the clients of success.

There are two ways to controlled these high fees - by imposing control over the fees or by levying a high rate of tax on these incomes. I prefer a high rate of tax, as it is easier to handle rather than levying price controls over all types of professional services.

Some people said that there is a risk of brain drain, i.e. the talented people will go to other countries. This is the argument given by proponents of the low tax and the free market. There is a flaw in this argument - as the high tax is intended to be levied on income derived within the country. How is the brain drain going to occur?

There could be a brain drain in respect of medical specialists treating rich foreigners in Singapore, as the experts can practice in other countries. We have to weigh the economic benefits of treating foreign patients in Singapore with the high fees that are being paid by our locals for these medical services. Looking at the high cost of living and services in Singapore, I prefer that to avoid earning the money from foreigners and to keep the cost of health care at an affordable level.

If we can collect more tax on high incomes, we can do away with GST (goods and services tax) entirely, and not just on essential necessities. Besides being a burden on low income people the GST is a wasteful tax, as it imposes  a heavy burden and administrative expenses on businesses to collect the tax, and adds to the overall cost.of doing business.

Tan Kin Lian