Mon, Dec 23, 2013 - Page 8 News List

Tax revamp needed for equality

By Norman Yin 殷乃平

Although social fairness demands intergenerational equality, that has all but evaporated after the estate and gift tax was changed from a highly progressive tax into a 10 percent proportional tax.

Without the wealth tax and the estate and gift tax to adjust the wealth gap, and with a lame income tax and a regressive consumer tax, the unfairness and the divide between rich and poor has become an overwhelming social problem.

Tax fairness must be judged based on the changes to the progressiveness of the overall tax structure. Over the past 30 years or more, incentives, deductions and benefits have destroyed the tax framework and reduced the tax base.

Functions originally established to promote social fairness no longer exist and this remnant of a system is only capable of catching wage earners while it is incapable of maintaining fairness.

Tax reform requires daring and resolution and a complete makeover, and small surgical changes to this or that individual tax subsystem will not do.

Norman Yin is a professor of financial studies at National Chengchi University.

Translated by Perry Svensson

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