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Editorial: It's not about paying higher taxes

It is one of the strangest contradictions in Taiwan's affairs that political debate is not merely dominated but almost monopolized by the issue of independence or unification. This issue -- constrained as it is by the Taiwanese people's will, the strategic interests of the US and the internal politics of China -- has little chance of significant development for many years to come, while matters that should be very much to the fore, such as tax policy, occasion political interest not as ideological issues but simply as ways of scoring points against opponents.

Rather than taking the trouble to understand what Chen Shui-bian's (陳水扁) call to increase taxes is really about, most of the political class and its media flunkies have simply jeered at Chen for violating a previous promise not to raise taxes. While the government has defended itself, saying that Chen's "no new taxes" pledge applied to his last administration, not this one, it has done little to prepare the public for what it has in mind, neither explaining clearly what is intended or why it is necessary.

Elsewhere of course, attitudes toward taxes can be definitive of political identity. Some support a low-tax, low-spending government, thin on social provisions and safety nets, with the extra income going to the haves and the extra insecurity the lot of the have-nots. Others see taxation as a way of ameliorating social inequalities to produce a more equal society, which they take to be a desirable end. Some will argue that letting the haves keep more of what they make gives an incentive for them to make even more and spend more, and leads to wealth creation and consumption which in the end benefits everyone. Others will argue that rampant inequality is socially corrosive and should be prevented by redistribution through taxation and spending.

Many foreign readers will find these juxtapositions of viewpoint familiar to the point of exasperation from election campaigns in their home countries. But to show just how little such issues are thought about in Taiwan, do the following thought experiment. Any media group in Taiwan has an easily identifiable stance on independence or unification; name a newspaper or a TV company and almost anyone you meet can tell you exactly where they stand. Ask where such groups stand on taxation policy and see what response you will get.

Up to 10 years ago things were more simple. The Chinese Nationalist Party (KMT) used to have a pretty straightforward taxation policy based on everyone paying next to nothing and getting next to nothing in return. The Democratic Progressive Party (DPP) on the other hand used to advocate a widening of social programs but, since they didn't realistically have a chance to be in government, they were never too forthcoming about how these were to be paid for. Then, about a decade ago, the KMT began to try to snaffle the DPP's growing support by introducing its own social programs, but never really got around to working out how these were to be paid for either, hence, for example, the perennial problems of the National Health Insurance Plan. The KMT also had other bad habits, cutting the tax burden for its corporate cronies and giving massive tax breaks to highly profitable industries -- semiconductors being the most notorious example -- which didn't need them.

The problem now is that taxation has been so little in the public eye that few people understand where we have been, where we are now, what our obligations are and what choice we have in how they might be met.

In the end this is not about whether companies or individuals should pay more tax, it is about the kind of society that we want to live in. Taiwan seems to be so obsessed with unanswerable questions about sovereignty, that such practical considerations go unvoiced.
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