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.
Taiwan was listed in 14th place among the world's wealthiest country in terms of GDP per capita, in the latest rankings released on Monday by Forbes magazine. Taiwan's GDP per capita was US$76,860, which put it at No. 14 on the list of the World's 100 Richest Countries this year, one spot above Hong Kong with US$75,130. The magazine's list of the richest countries in the world is compiled based on GDP per capita data, as estimated by the IMF. However, for a more precise measure of a nation's wealth, the magazine also considers purchasing power parity, which is a metric used to
Renovations on the B3 concourse of Taipei Main Station are to begin on Nov. 1, with travelers advised to use entrances near the Taiwan Railway or high-speed rail platforms or information counter to access the MRT’s Red Line. Construction is to be completed before the end of next year, Taipei Rapid Transit Corp said last week. To reduce the impact on travelers, the NT$95 million (US$2.95 million) project is to be completed in four stages, it said. In the first stage, the hall leading to the Blue Line near the art exhibition area is to be closed from Nov. 1 to the end
Taipei’s Ximending (西門町) shopping area welcomed the most international visitors, followed by Taipei 101, Songshan Cultural and Creative Park and Yangmingshan National Park (陽明山國家公園), a list of the city’s most popular tourist attractions published by the Taipei Department of Information and Tourism showed. As of August, 69.22 million people had visited Taipei’s main tourism spots, a 76 percent increase from 39.33 million in the same period last year, department data showed. Ximending had 20.21 million visitors, followed by Taipei 101 at 8.09 million, Songshan Cultural and Creative Park at 6.28 million, Yangmingshan at 4.51 million and the Red House Theater (西門紅樓) in
Taiwan yesterday expelled four China Coast Guard vessels that entered Taiwan-controlled restricted waters off Lienchiang County (Matsu) shortly after the Chinese People’s Liberation Army announced the start of its “Joint Sword-2024B” drills around Taiwan. The Coast Guard Administration (CGA) said in a statement that it had detected two China Coast Guard ships west of Nangan Island (南竿) and another two north of Dongyin Island (東引) at 8am yesterday. After Chinese ships sailed into restricted waters off Matsu shortly afterward, the CGA’s Kinmen-Matsu-Penghu Branch deployed four patrol vessels to shadow and approach the vessels, it said. The incidents pushed up to 44 the number
RSS