While the actual act of paying tax and thereby earning less every month could be a deal breaker for some, I was more intrigued by this paragraph:
Apart from contributing a sizeable part to the country's GDP, income tax funds help governments provide social insurance that encompasses healthcare, unemployment benefits, disability, pension and other such funds for the taxpayer.
Like Mike.Park, I've had various conversations with Scandinavian friends and they echo Mike's post. The difference obviously is that they are Danish citizens living in Denmark and reap the benefits of their tax directly, as opposed to the situation in the UAE with a 80%+ expat community. The question then becomes if the expat community in the UAE would be able to reap the same benefits.
Take disabilty and pension as an example. This to me has an element of permanancy in it. Under the current visa rules it is extremely easy to deport someone. Also, if one retires you have a set time to depart the UAE. Should the situation arise where I pay tax to fund a pension plan, will that pension be payed out to me irrespective of my location after retirement? Same for disability.
Unemployment. If I am unemployed, I can not remain in the UAE. If I pay tax towards an unemployment fund I would again expect to be taken care of for a while. Which implies that I will be allowed to stay here, which is not the case at the moment.
Like any normal society (and I use this term loosely), any person who pays tax to a legitimate government expects to have a say in how that tax is distributed. And there is absolutely no way on God's green earth that I foresee expats having a say in how their tax is applied.
The eternal pessimist in me predicts that this tax issue is just another way for the government to have expats bankroll the Emiratis. I do not have a problem with the government looking after its citizens when they use their own money. But to create an Emirati welfare state on the back of my tax dirhams and in the process exclude me from that state, does not sit well with me. I am not that clever so may be wrong, but there are elements of communism in this.