Saturday, March 15, 2014

Commonwealth: Good news on taxes

Commonwealth notes that taxes in Taiwan are being truly reformed....
Subsequently, Chang announced the details of tax reform. The corporate income tax on financial industry companies will be raised back to 5 percent from the present tax rate of 2 percent. The amount of corporate income tax that shareholders can claim as tax credits to be deducted from their personal income tax, under Taiwan's integrated tax system, will be halved. A tax rate of 45 percent will be applied to the portion of rich people's net income that exceeds NT$10 million per year. If all these changes are implemented, the state will raise an additional NT$80 billion in tax revenue.

Together with the proposed tax hikes, which are supposed to help fill the budget gap, the reforms also include tax cuts for the average wage earner. The 6.47 million wage earners and the some 510,000 people with disabilities will have their tax-deductible quota raised by NT$20,000 to lessen their income tax burden. In terms of corporate taxes, the government is for the first time using tax measures to encourage employment. Small and medium enterprises can claim additional salary expenses multiplied by 1.3 as costs. The government also encourages companies to invest in R&D to boost their competitiveness.
The article frankly states that the idea that subsidizing the rich as America does will help the nation is absurd and untenable. Kudos to the writers. Taiwan's ratio of taxes to GDP is among the lowest in the developed world, the article points out.

Kudos also to the Ma government for setting out to do this in an election year.
Daily Links:
  • If a foreigner like me lead a political protest in Taiwan, I'd certainly be arrested. But when Chinese lead protests.... the police do nada.
  • Ma said it was "undemocratic" but note that prominent pro-Unification gangster Chang An-le appeared to shout slogans and generally criticized the pulling down of the state of Sun Yat-sen. How long before his cohorts start showing up to break up rallies and election activities?
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!


Anonymous said...

45% is really high for income taxes, and a threshold of 300,000 USD is really low too. This makes it really hard to attract foreign talent and impossible in situations where there may be double taxation. The truly wealthy make most of their income via capital gains and that's where there can be real progress made in reducing inequity between rich and poor.

TaiwanJunkie said...

Michael Cole, at first I was quite angered, then I realized this whole thing only serves to turn taiwanese in general off about China.

First, the flag identification. Almost zero person in Taiwan identify with that Five Star flag. In fact, I think everyone in the country that ID with that flag you have already met that day.

Now the issue has always been independence vs future unification. But that "future unification" was always sold as a conceptual Democratic China. These guys (along with the unwitting Chinese tourists) are essentially pointing out there is no such thing as "future unification with a democratic China". These Five Star waving folks have a very simple message: unification WILL BE annexation by China under that Five Star flag.

This truth essentially breaks apart that Fairy Tale which the KMT worked so hard to maintain. With that Fairy Tale gone, you know what that means: if you are for the white sun and blue sky flag, if you at all identify with that flag (which is 99% regardless of blue vs green) you are essentially pro-independence and anti-annaxation.

Michael, I can't see a more unifying force for all Taiwanese everywhere than the picture you just posted!

Readin said...

Re the Chinese leading protests: It's a shame Taiwan doesn't have an Equal Protection Clause that FESP could sue under.

Anonymous said...

Excellent point made by JMC. Thanks for posting the link.

Those idiots are just as disgraceful to Taiwan as the Taiwanese military brass that keeps selling secrets to China.

When will they learn.

Anonymous said...


You completely missed the important point made by JMC.

(Chinese visitors to Taiwan can become involved in politics here with no repercussions, but if a westerner/japanese/other visitor does so, they get booted out of the country immediately.)

John Scott said...

Do you think it ever occurs to ANY of these Chinese flag-wavers that the only reason they are able to do this is because they are experiencing free speech and civil liberties for the first time in their lives??

They probably never show such fervent patriotism at home, but when they experience the feeling of conquering Taiwan, they just can't hold back.

Strange that these 'fresh off the plane' tourists have freedom of speech in Taiwan, but people with non-Chinese DNA who have lived, worked, and established families in Taiwan (and who really have a stake in developments) do not.

Has this 'freedom of speech for Chinese DNA only' rule been significantly challenged by Hong Kong, Uighur, or Tibetan activists in Taiwan? Or by any of the 1989/TianAnMen refugees?

TaiwanJunkie said...

anon, I do understand that the double standard was the main point of JMC's post.

That goes without saying.

My point is these type of anger inciting events actually end up unifying Taiwan and exposes the unification camp for what it really is.

I don't think pointing that out should mean I "missed the point."