Speaking at a hustings for the Chinese Nationalist Party’s (KMT) presidential primary candidates, Hon Hai Group founder Terry Gou (郭台銘) pledged that, if elected, he would provide free childcare services for all children aged six and under. Instead of funding the policy from existing government budgets, Gou came up with three methods to finance the policy, one of which was a “wealth tax” on super-rich people.
Gou’s plan is to target the top 1,000 wealthiest people, who would each pay an additional tax of NT$100 million to NT$300 million (US$3.2 million to US$9.6 million) per year.
For example, the government could levy an annual tax of NT$300 million on the top 100 wealthiest people in Taiwan, NT$200 million on the next 400 and NT$100 million on the rest. By doing so, the wealth tax would, in theory, boost the government’s tax revenue by a total of NT$160 billion annually.
The problem is: How to define the top 1,000 wealthiest people — and is the plan feasible?
Many wealthy people in Taiwan and the US have expressed their willingness, through open letters or petitions, to pay a wealth tax to narrow the income gap between rich and poor people.
However, it is undeniable that some would be unwilling.
For instance, when former French president Francois Hollande launched a wealth tax in 2012, numerous wealthy people left France. Some of them even opened shell companies, which were nothing more than post office box numbers located in tax havens, such as the Cayman Islands, Samoa, Belize or the British Virgin Islands.
Furthermore, the super-rich are usually extremely adept at hiding their wealth, especially those in possession of laundered money. Therefore, using data from the National Taxation Bureau might be an unreliable way to calculate the amount of revenue that could be generated from Gou’s policy.
If the government were to impose a wealth tax on the top 1,000 wealthiest people with the highest net income before taxes in the order stated above, it would likely be extremely ineffectual, as they might not have the highest gross consolidated income.
This is because they do not have to pay tax on gains derived from securities transactions and can legally reduce their tax burden by making arrangements for bequests or real-estate transactions in advance. Furthermore, certain incomes are taxed separately, and charitable donations are tax deductible. The super-rich can afford to hire professional accountants to help them reduce their tax bills.
The difficulty successive governments have had in raising basic salary levels in Taiwan suggests that not every rich person is willing to shell out hundreds of millions every year to help the less well-off members of society raise their children.
Whoever wins the presidential election next year would be able to pass legislation to introduce a new wealth tax if they hold a majority in the legislature.
However, Article 7 of the Constitution states that “all citizens of the Republic of China, irrespective of sex, religion, race, class, or party affiliation, shall be equal before the law.”
An amendment to the law at a constitutional level would be difficult, requiring a proposal to be submitted by one-fourth of the legislature and any subsequent resolution to be passed by three-fourths of the legislators present at the vote, from a quorum of at least three-fourths of the total number of legislators.
Clearly, it would be difficult to institute a wealth tax, both in theory and in practice. Despite that, Gou’s policy — which is nothing more than a campaign trick — will likely be supported by voters.
Jeffery Lin is a health and safety consultant.
Translated by Eddy Chang
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under