Wednesday, May 09, 2012

What do stock market taxes and F-16s have in common?

I have the terrible feeling that, because I am wearing a white beard and am sitting in the back of the theatre, you expect me to tell you the truth about something. These are the cheap seats, not Mount Sinai. -- Orson Welles

No need to go to The Avengers when we've gotten a steady flow of theater right here in our domestic politics. First the KMT staged a play as pious as any medieval Mystery Play on the proposed new taxes on income derived from securities transactions....
The Executive Yuan yesterday suffered a setback to a major policy for a second consecutive day when Chinese Nationalist Party (KMT) legislators refused to place on the legislative agenda an amendment imposing taxes on income earned from securities.
One of the KMT legislators, Wu Yu-sheng, proposed delaying a review of the amendments, blaming it on being overwhelmed with the beef mess. But who is Wu?
Wu, who has been labeled a loyal soldier of President Ma Ying-jeou (馬英九), yesterday said the “KMT caucus will not do whatever the executive branch wants the caucus to do from now on.”

“The caucus will act at our discretion if the executive branch fails to communicate with lawmakers before a major policy is made,” Wu said.
So... question to my readers: when the "loyal soldier" of President Ma opposes President Ma's policies, is it because he has switched sides, or is it because Ma wants him to? This way the Administration can say it pushed the law but oh so sorry our recalcitrant legislature decided to thumb its nose at us and isn't it a shame that no one can control those unruly lawmakers? [cue crocodile tears]. And lo and behold....
With one month left before the legislative session enters the summer recess, it appears unlikely that the amendments to the Income Tax Act (所得稅法) and the Income Basic Tax Act (所得基本稅額條例) will clear the legislative floor this session.
Alas, the revisions are delayed until the next legislative session. What a pity, eh?

Another bit of theater displayed this week was the F-16s. Remember them? Sometime back in the Qing Dynasty the Taiwan government decided it needed F-16s and sent a letter to the US government asking for 66 F-16s. Well, here we are years later and still no F-16s. No sooner did Obama announce that the US might sell Taiwan a few F-16s the KMT broke out in a cold sweat. Diversion! The prospect of F-35s is raised! No hope of that, but the idea makes a nifty dislocation. Further news came out: the budget might not be there for the new aircraft!

Oscars for everyone! As a longtime observer noted, whenever the US moves forward on the F-16s, the KMT has a sudden bout of budget indigestion, and whenever Taiwan presses on the F-16s, the US refuses to sell. The only problem is determining whether the cooperation is planned in advance or whether both sides are simply acting out roles they both know so well there is no need to notify the other guy in advance.

Yes, Taiwan, what a delightful place to live, so many plays staged for our benefit.
Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.


paul said...

wow michael you're always so cynical! are you a new yawker like me? lol!

hey so can taiwan really afford f-16 c/d's or what? i read that there's a backlog of already ordered arms worth $13 billion and that taiwan is having trouble paying it off. is that true? is so, how can taiwan even afford the f-16 a/b upgrades, the f-16 c/ds it's been begging for past several years, and submarines it's been wanting to buy and now wanting to build??

何光煒 said...

I don't think things are as simple as they seem, but I also don't think the blame can be put squarely on the Kuomintang as people love to do. I think it's a shallow interpretation to say that the F-16 budget issue is an intentional show on the part of the Kuomintang.

From my perspective, the government wanted new F-16s, and the US never approved. So when the US finally said they would do ANYTHING, Taiwan felt it was better than nothing. Now the US may be willing to sell new planes, but Taiwan committed to the upgrades well before the US announced that.

However, to even suggest that Taiwan would be able to pay the $600 million per jet that it would cost for F-35s (not to mention the waiting time and the almost assured US unwillingness to sell them) is just preposterous.

Michael Turton said...

I think it's a shallow interpretation to say that the F-16 budget issue is an intentional show on the part of the Kuomintang.

It is hard for me to interpret it in any other way, after all the years I've watched them play games with it.

paul said...

hello?? i didnt get an answer to my questions. :/

Michael Turton said...

Paul, I thought your questions were rhetorical. Of course Taiwan can afford them. The question is whether it is willing to pay for them.

paul said...


well according to taipei times and other taiwan newspapers/news sites, everyone's saying how the govt doesnt have the money to pay for the f-16 a/b upgrades, purchase the f-16 c/ds, pay for the submarines, and pay for the rest of the arms taiwan has ordered from the u.s. from last several years which totals US$13 billion thus far. so not sure what to believe. :/

Michael Turton said...

Paul, the money could be there if the political will was there to ask for the necessary taxes. The issue is political will, not the ability of Taiwan to generate cash. At the moment there doesn't seem to be the political will....