This perspective can address one of the longstanding weaknesses of traditional inheritance taxes, which often raise concerns about fairness because beneficiaries may be forced to liquidate family businesses or homes to pay taxes. By contrast, a system linked to realised transactions or deferred payment mechanisms could alleviate cash-flow concerns, while still capturing part of the economic value generated by society as a whole.
That said, measuring the amount of societal wealth within an asset poses its own set of challenges. For example, when assessing the price appreciation in a property, there may not be consensus on whether this is attributed to a new MRT, a new mall or other intangible reasons.
BEHAVIOURAL EFFECTS OF WEALTH TAXES
There is another dimension that has received relatively little attention in the Singapore debate. Wealth taxes are often discussed primarily as revenue-raising tools but their behavioural effects may be equally important.
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