The Alliance for Fair Tax Reform (AFTR) yesterday slammed a recent TV commercial claiming that lower tax rates correlate with a strong economy, and challenged the anonymous advertiser to a public debate.
In recent weeks a repeatedly aired TV commercial has sent the message that the lower the tax rate, the better the economy and the lower the unemployment rate.
The commercial cites the US economy under former president Ronald Reagan’s administration as an example to support their claim on the relationship between the economy and tax rates.
It also says that Hong Kong and Singapore are more economically developed and people there have more purchasing power than Taiwanese because of lower tax rates.
“Economic development in a country is affected by multiple factors, and there is no absolute direct connection between economic development and the tax rate,” Huang Shih-hsin (黃世鑫), a public finance professor at National Taipei University, told a press conference in Taipei yesterday.
“How good is the economy in tax-free paradises such as the British Virgin Islands or the Cayman Islands?” Huang asked. “People register their companies at these places just to avoid taxes, but they usually don’t make any actual investment.”
On the other hand, in high tax countries such as Sweden, “the economy performs quite well, the social welfare system is great and the quality of life there is high,” he said.
Chien Hsi-chieh, spokesman for the alliance, pointed out that the commercial is not telling the full story.
“[Former US presidents Ronald] Reagan and [George] Bush wanted to boost the economy by cutting taxes — it did work at first, but caused a bigger gap between the rich and the poor,” Chien said.
“In the end, the US government became severely indebted, and the unemployment rate went up to 12 percent under the [George] Bush administration,” he said.
The issue only improved a little after Bill Clinton increased taxes, he said.
Chien went on to say that Hong Kong and Singapore were able to keep low tax rates because they were city-states.
“They don’t spend money on agriculture or national defense,” he said. “And in fact, while the tax rate in Taiwan is 40 percent, the real tax rate is only 13 percent after exemptions for businesses, which is already lower than the 17 percent tax rates in Hong Kong and Singapore.”
Chien said he believed further tax cuts may lower the tax rate to below 10 percent.
“While [President] Ma Ying-jeou [馬英九] has so many projects planned, how will the government get the money?” AFTR convener Wang Jung-chang (王榮璋) said.
Wang suspected that business groups lobbying for reductions in inheritance, gift and business taxes were behind the commercial.
“So this is really a tax cut campaign for the rich, but they’re brainwashing the public to join their campaign,” Wang said.
The Coast Guard Administration (CGA) yesterday said it had deployed patrol vessels to expel a China Coast Guard ship and a Chinese fishing boat near Pratas Island (Dongsha Island, 東沙群島) in the South China Sea. The China Coast Guard vessel was 28 nautical miles (52km) northeast of Pratas at 6:15am on Thursday, approaching the island’s restricted waters, which extend 24 nautical miles from its shoreline, the CGA’s Dongsha-Nansha Branch said in a statement. The Tainan, a 2,000-tonne cutter, was deployed by the CGA to shadow the Chinese ship, which left the area at 2:39pm on Friday, the statement said. At 6:31pm on Friday,
The Chinese People’s Liberation Army Navy’s (PLAN) third aircraft carrier, the Fujian, would pose a steep challenge to Taiwan’s ability to defend itself against a full-scale invasion, a defense expert said yesterday. Institute of National Defense and Security Research analyst Chieh Chung (揭仲) made the comment hours after the PLAN confirmed the carrier recently passed through the Taiwan Strait to conduct “scientific research tests and training missions” in the South China Sea. China has two carriers in operation — the Liaoning and the Shandong — with the Fujian undergoing sea trials. Although the PLAN needs time to train the Fujian’s air wing and
The American Institute in Taiwan (AIT) put Taiwan in danger, Ma Ying-jeou Foundation director Hsiao Hsu-tsen (蕭旭岑) said yesterday, hours after the de facto US embassy said that Beijing had misinterpreted World War II-era documents to isolate Taiwan. The AIT’s comments harmed the Republic of China’s (ROC) national interests and contradicted a part of the “six assurances” stipulating that the US would not change its official position on Taiwan’s sovereignty, Hsiao said. The “six assurances,” which were given by then-US president Ronald Reagan to Taiwan in 1982, say that Washington would not set a date for ending arm sales to Taiwan, consult
A Taiwanese academic yesterday said that Chinese Ambassador to Denmark Wang Xuefeng (王雪峰) disrespected Denmark and Japan when he earlier this year allegedly asked Japan’s embassy to make Taiwan’s representatives leave an event in Copenhagen. The Danish-language Berlingske on Sunday reported the incident in an article with the headline “The emperor’s birthday ended in drama in Copenhagen: More conflict may be on the way between Denmark and China.” It said that on Feb. 26, the Japanese embassy in Denmark held an event for Japanese Emperor Naruhito’s birthday, with about 200 guests in attendance, including representatives from Taiwan. After addressing the Japanese hosts, Wang
RSS