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Academics question national budget

Tax reform should be directed at encouraging social justice at a time when the wealth gap is widening in Taiwanese society, academics and social activists said at a seminar yesterday.

Speaking at the seminar, sponsored by the Garden of Hope Foundation, Peacetime Foundation of Taiwan chairman Chien Hsi-chieh said that the new government should capitalize on improved ties with China to lower defense spending and transfer the savings to cultural, educational and social welfare activities.

BUDGETING

He said that despite improved ties with China under the Chinese Nationalist Party (KMT) government led by President Ma Ying-jeou (馬英九), the budget for national defense spending this year has been set at NT$341.1 billion (US$11.2 billion), accounting for the biggest single budget category, at 20.1 percent of overall expenditures.

Its share of the total budget, which was approved earlier this year under the previous Democratic Progressive Party administration, is 16.4 percent higher than last year’s, he said.

On the other hand, the budget for education this year has dwindled to NT$318.3 billion, or 18.7 percent of total expenditures, down from its 19.3 percent share last year, Chien said.

The budget for social welfare programs only accounts for 17.5 percent of overall spending, he said, leading him to question why defense spending could not be slashed in favor of education and social welfare activities.

To provide the public with non-commercialized, equitable and universal education and social welfare systems, Chien said Taiwan needed to reform its tax system to raise revenues because the current average income tax rate of 13.7 percent is not sufficient to support the government’s spending needs.

TAKE FROM THE RICH

He suggested that the government increase its tax base by reducing or eliminating tax breaks for high-income earners and impose taxes on capital and overseas investment gains.

Tseng Chu-wei (曾巨威), an economics professor at National Chengchi University, said that the government should take action to stamp out tax evasion among the wealthy.

He proposed that the government launch tax reform legislation that would help the poor gain a greater share of national resources through social welfare programs.

National Taiwan University professor Lin Wan-i (林萬億) warned the KMT government of severe consequences if it devotes too many resources to specific interest groups just to deliver on Ma’s campaign promises.

Excessive spending on social welfare benefits and programs like labor pension reform would unfairly pass on financial debts to future generations if the government failed to manage its resources within reasonable constraints, Lin said.
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