Fri, Jan 02, 2009 - Page 8 News List


On Diane Lee’s ‘rebate’

It appears that the Democratic Progressive Party (DPP) caucus and the Taiwanese news media are mistaken in referring to a US$600 payment Diane Lee (李慶安) received from the US’ Internal Revenue Service as a “rebate.” It is not a rebate any more than the NT$3,600 in vouchers that the Taiwanese government plans to give its residents.

The US$600 Lee received was an Economic Stimulus Package payment. Anyone filing a US tax return for 2007 would be eligible for a payment of at least US$300 regardless of the amount of taxes paid — even if he or she paid no taxes.

The only thing the DPP caucus’ information tells us is that Lee filed a 2007 tax return to the IRS and, as a result, received the Economic Stimulus Package payment. This is significant, but it does not tell us that she paid any tax.

Any US taxpayer living 330 days outside the US in any calendar year is eligible to receive an exemption on US$70,000 of earned income for which US taxes do not need to be paid. Any amount earned over that figure, plus any amount earned from a US source, would be taxable.

In other words, if Lee earned less than US$70,000 outside the US and filed a tax return showing this while claiming the exemption, then she would not have had to pay any tax — but still would have received the US$600 payment. If she had received more than US$70,000 in earned income outside the US, she would have had to report it and pay tax on the excess amount.



An end to isolationism

Tristan Liu’s (呂曜志) editorial (“The risks and costs of opening to China,” Dec. 30, page 8), illustrates the type of insular mentality that is plaguing those who give advice on Taiwan’s future. Make no mistake, the brain drain started happening years ago and much of Taiwan’s power elite is already managing operations in China.

Manufacturing is moving off the island, and a subsequent brain drain is occurring not only because of high labor costs and bigger salaries, but more importantly because of a lack of forward planning, innovation and creativity within many of Taiwan’s industries. Significant opportunities for growth don’t exist in Taiwan and, as such, the country will continue to lose its cutting edge, regardless of whether it has closer ties with China.

In short, Taiwan’s economy will continue to flounder unless it has a plan for the future. At the root of all of this stagnation is an archaic education system, augmented by fly-by-night cram schools, that continues to produce robotic graduates who are not encouraged to take risks and be creative.

This is where Taiwan can capitalize on reinventing itself and get a jump on the Chinese. Taiwan needs to double the number of schools, reduce class sizes and start teaching students how to think. It needs to challenge its youth to create a Taiwan that is not preoccupied with replicating other technologies but can, through information technology, carve out its own niche.

In the meantime, Taiwan needs to look at its existing areas of strength: a health care system around which cosmetic surgery and tourism could be built; a thriving city and beautiful country around which resort possibilities exist to attract affluent Chinese tourists; and the opportunity to create tax free shopping zones.

The sky is the limit. But we need to look beyond the status quo. Isolationism is clearly not an option as Taiwan stagnates. Yes, the influx of Chinese and the outflow of some Taiwanese will create problems, but the opportunities far outweigh the negatives.

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