A day trading tax cut that passed its first review in the legislature yesterday would encourage financial speculation without promoting economic growth, activists said.
“The stock market is already relatively stable, so why do we need to cut tax rates on day trading?” Working Poor and Tax Policy Research Center convener Hung Ching-shu (洪敬舒) said.
The tax cut, which was reviewed yesterday by the Legislative Yuan’s Finance Committee, would primarily benefit wealthy speculators, Hung said.
Photo: Chen Chih-chu, Taipei Times
As proposed, the cut would halve the transaction tax rate for day trades to 0.0015 percent.
“Unless they had insider information, most ordinary people would not dare play around with day trading,” he said. “If you do not have a lot of capital, there is a possibility you will wipe out your life savings.”
“This proposal rewards speculation while discouraging long-term investment,” Hung said. “Day trading adds little value to industry, and it does not meaningfully benefit the stock market.”
While the government has stated that the cut would be evaluated after its first year based on its benefits to the stock market, it remains unclear what metrics would be used, raising concerns that the government could “cherry-pick” data to defend the cut, he said.
“We lack tax cooperation agreements with most nations, which makes us something of a safe haven,” Economic Democracy Union convener Lai Chung-chiang (賴中強) said. “Domestic transaction taxes on day trading do not deter day traders.”
“The government should not force the wrong medicine on the stock market,” Taiwan Women’s Link president Huang Sue-ying (黃淑英) said.
Replacing the current transaction tax — which is based on investment value — with a capital gains tax would be a more effective way to encourage day trading, she said.
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