Sat, May 17, 2008 - Page 11 News List

Group calls for equitable tax reform

'ALREADY UNFAIR' People with an annual income of NT$200 million or higher are taxed at 11 percent, while average white-collar workers are taxed at 13 percent


Citing the possibility of a new tax reduction for the rich and an increasing tax burden on low and middle-income earners, a tax reform promotion union said yesterday that the incoming Chinese Nationalist Party (KMT) government should focus on equitable distribution of wealth.

“With Taiwan’s tax policies tending to offer more tax breaks for the wealthy rather than the poor, we urge president-elect Ma Ying-jeou (馬英九) to form a government that does not favor higher-income earners,” said Wang Jung-chang (王榮璋), head of the tax reform union, an umbrella group encompassing 21 non-profit organizations from around the country.

At a union press conference, Wang said the employed working class pays 75 percent of the nation’s total tax revenue, indicating an imbalance in tax liability between employers and employees.

Ma’s tax policy plans will reduce the nation’s annual tax income by NT$246.5 billion (US$7.95 billion), although most of the benefits will be enjoyed by the rich, Wang said.

“If the new government fails to improve the situation within the next two years, the union will call for citizen action such as a non-cooperation movement against the unfair tax system,” Wang said.

The union cited two KMT tax proposals — a series of tax reduction plans and a draft to boost the development of areas neighboring the Taiwan Taoyuan International Airport — as two potential measures that could lead to such social opposition.

“The tax reduction drafts on the future goods exchange tax and the estate tax, currently in the legislative process, will mostly benefit those with above-average wealth,” said Chien Hsi-chieh (簡錫土皆), executive director of the Peacetime Foundation of Taiwan and another leader of the tax reform promotion union.

Chien described the situation as already unfair, saying that people with an annual income of NT$200 million or higher are only taxed at 11 percent of their total income, while average income white-collar workers are taxed at 13 percent.

“In addition, the current tax statute allows investors to enjoy tax-free earnings from the stock market,” Chien went on, saying that the top 1 percent of the country’s wealthiest people earn an average of 58 percent of their total income from the stock market.

As for the plan to economically boost the areas adjoining the airport, the union said the draft, which will offer tax reductions or even zero tax to investors, should be abandoned.

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