Sun, Nov 11, 2007 - Page 8 News List

Government has broken its social contract

By Lai Hsiang-Ling 賴香伶

Taiwan has one of the lowest tax burden ratios worldwide, with a large percentage of its tax revenues coming from income taxes. Wage earners are therefore the major sponsors of national development.

Although the government has cut taxes over the years to stimulate business and investment, it issues national debts once it faces a financial deficit. Figures released recently by the Directorate General of Budget, Accounting and Statistics showed that the national debt had exceeded NT$4 trillion. This means that our grandchildren are in debt even before they are born. The government borrows money in advance from the next generation whenever needed, while the public continues to suffer as commodity prices keep surging. Consumers pay taxes to the government but are unable to demand it does something in return. What kind of government is that?

Jean-Jacques Rousseau, the 18th century French philosopher considered by many to be the "father of democracy," advocated natural rights and the theory of the "social contract," which directly challenged the contract relationship between the ruler and the ruled. Any government that only protects the wealth and rights of a few people but disregards the majority's rights, freedom and equality breaks the social contract with the public.

During elections, candidates are quick to promise tax cuts, but once in power they change tack and impose a variety of administrative fees and taxes. By charging various types of fees, the government is able to collect funds little by little from an unsuspecting public.

Tax incentives are offered, but only for businesses to attract foreign investment. Ordinary people cannot enjoy this kind of tax relief; instead they are treated like cash machines from which the government continuously draws money for its finances.

Fuel prices, home mortgages, car loans and tuition fees have all risen, but salaries have only decreased. If a person loses his or her job and has no access to financial help to pay off his or her credit card debts -- with interest rates running up to 20 percent -- he or she may soon be hounded by creditors. Government failure to address this issue has led some people to commit suicide.

Both the pan-green and the pan-blue camps have to take responsibility for the government debt that our next generation will have to inherit.

Government concessions on public policies are futile as they have failed to standardize commodity prices. In Taiwan, the gap between the rich and the poor is getting wider. Some people are able to pay more than NT$100 million in a single swipe of their credit card, while some cannot even pay NT$400 for their children's monthly school lunch fees.

Both the ruling and the opposition parties have the same attitude when it comes to the issue of improving the standard of living and slowing economic growth.

The government is not willing to deal with big corporations to solve the problem. It also says it cannot interfere in the market because that would mean interfering with "market mechanisms." So what has it done? It has increased the number of scooter parking lots on the sides of streets and installed more speed detectors to collect more fees from the public. Tow trucks can be seen out on duty 24/7, and traffic cops are busy writing tickets everywhere. This is how the government deals with issues on raising the standard of living.

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