TAXES for some people were actually raised in the recent Budget but judging by the apparent indifference of those affected, one could assume that these folks do not actually mind paying more. Perhaps they even agree with Finance Minister Tharman Shanmugaratnam that the tax 'is a means of redistribution in our society'.

The tax in question is the property tax. Last month, Mr Tharman announced that the property tax structure would shift to a 'progressive property tax' system of up to 6 per cent, replacing the flat 4 per cent tax rate on owner-occupied residences. While the increase in the actual amount in property tax is likely to be insignificant to most rich homeowners, the government's move to tax the rich is poignant, especially when viewed in the context of the global backlash against income disparities and runaway bonuses.

For those who own homes with an annual valuation (AV) of about $80,000 (that is, a monthly rental of about $6,700), the increase in property tax will be less than 2 per cent. Those who own homes with an AV of about $150,000 (that is, a monthly rental of $12,500) will see their property tax increase about 25 per cent or about $1,500. Homeowners with an AV of $150,000 or more represent the top 0.5 per cent of private property owners. In Singapore, less than 20 per cent own private property.

If, as it seems, the increase in property tax is acceptable to those affected, could the same minority of wealthy Singaporeans afford to carry a heavier income tax burden in the future? In Singapore, the top-tier income tax is relatively low at 20 per cent. The top 10 per cent of the working population already account for about 94 per cent of the total personal income tax collected.

The slowdown in the global economy and burgeoning national deficits mean that some countries will certainly have to see income tax rise. In the UK, for instance, the top tier of personal income tax has already been increased to 50 per cent. Populist measures such as taxes on bonuses have also gotten considerable airing recently. These taxes are perhaps an implicit acknowledgement that there exists in society a strata of super-wealthy who can afford to make higher tax contributions.

Singapore has its share of the super-wealthy, for whom $20 million in bonuses are not unheard of. Still, when Mr Tharman introduced the new property tax, he was careful to add that the government has to keep income tax rates low in Singapore 'to maximise incentives for enterprise and hard work, so that our economy remains dynamic and all Singaporeans benefit'. And while 'the rich pay more', Singapore still wants taxes to 'remain low by international standards'.

This approach is probably best given the trend towards lower income tax in the region and Singapore's desire to draw talent and wealth.