After the excitement of the presidential and legislative elections, society is cooling down and people are mending damaged relations caused by political disagreement. More importantly, the hatred and opposition between young people and the older generation must be repaired.
Leaving aside politics, the most obvious sign of the generational conflict in Taiwan is the uneven distribution of wealth.
According to UBS and PricewaterhouseCoopers’ Billionaire Insights 2019, the number of billionaires in Taiwan has increased to 40, and their total wealth has grown by US$1.1 billion.
The average age of Taiwan’s billionaires — among whom 16 are over the age of 70 — is 69, which is higher than the global average of 64, the report said.
Large inheritances are the main cause of this extremely uneven distribution of wealth and the worsening gap between rich and poor.
The government should promptly levy a wealth transfer tax on high-income groups, by raising the inheritance tax and implementing a minimum tax on high-income earners, to prevent the further widening of the wealth gap and achieve generational equity.
Rising real-estate prices have also made it increasingly difficult for young people to own their own home. Coupled with the slowdown in wage growth and the cost of raising children, there is less left for savings.
Meanwhile, older generations were able to purchase properties earlier, at a more affordable price, and as real estate has appreciated, their personal wealth has increased.
In 2018, 77 percent of Taiwan’s 8.06 million landowners were over the age of 45, and the largest portion, 28 percent, were over 65, Ministry of Finance data showed.
In contrast, during the same period, there were 560,000 landowners under the age of 34, a decrease of 62,000, or 11.2 percent. The number of landowners in the 45 to 34 age group also decreased by 59,000.
It is clear that generational inequality in asset distribution has worsened, and this is one of the reasons young people are unable to improve their situation.
As most land in Taiwan is in the hands of the elderly, young people cannot afford to buy a place to live — no matter how hard they work. This gives rise to a feeling of deprivation, making it difficult to eliminate the conflict between generations.
To solve the housing problem for young people, the government should establish a long-term, stable mechanism to promote social housing and curb investment in non-owner-occupied residential properties using policy instruments, such as financing and house taxes, to decommodify housing and resolve the paradox of high housing prices and high vacancy rates.
In Taiwan today, most social resources are in the hands of the baby boomers, who are roughly between the ages of 60 and 75.
In addition to shifting resources into welfare for the elderly, the government must also implement reasonable tax reform to address wealth distribution.
Housing justice requires that the government offer clear guarantees that housing is used for residential purposes rather than as an investment object to curb real-estate speculation.
That could perhaps reduce generational conflict and promote generational reconciliation.
Wei Shih-chang is an engineer.
Translated by Lin Lee-kai
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