US President George W. Bush has signed into law a massive bailout package for US financial institutions. The bill had initally been rejected by the House of Representatives amid concerns that spending US$700 billion of taxpayers’ money to buy up questionable assets and bail out financial companies was not socially just. However, after measures were added to protect the interests of the middle classes, such as tax cuts and exemptions, among other additions, the bill was approved by both houses of Congress.
President Ma Ying-jeou’s (馬英九) administration has also been confronting a financial crisis. How does its attitude compare to that of US officials? Ma’s government has proposed a series of measures to boost the economy and stock markets. On Sept. 9 it put forward 10 proposals to revitalize the economy, but the package fell short on policies beneficial to the public at large. The government does not seem to care much about the middle class. No wonder people are growing more concerned about social injustice and less confident in the government.
The Finance Ministry’s Tax Reform Committee is scheduled to meet today amid widespread calls from industrial and commercial interests for tax cuts to help the economy. The financial team set up by the Presidential Office has not come up with any measures to revive the stock market. It has only suggested cutting inheritance and gift taxes and setting up a sovereign wealth fund, and it seems likely that the Tax Reform Committee will act in accordance with these signals. These are tax cuts for the rich, however, and only serve to shift even more of the tax burden onto the shoulders of the less affluent.
Taxation in Taiwan is not well balanced. Most government revenue comes from income taxes. Many high earning companies and individuals pay very little tax because there are so many deductions and exemptions. Sometimes the extremely wealthy manage to pay less tax than the average office worker. Taiwan Semiconductor Manufacturing Corp chairman Morris Chang (張忠謀) has repeatedly called on wealthy Taiwanese to bear a fairer share of the tax burden. The finance ministry is aware of the situation, but unfortunately has been insensitive to it, so government policy continues to favor the wealthy.
The government knows that the deteriorating economic situation is causing ever greater income disparity and the Ministry of the Interior has proposed a plan to subsidize families whose monthly household income falls below NT$25,000. But recipients would be chosen by computer, which means they might include teachers and military personnel, who are already exempt from taxes, while those in real need are left out. This does not meet demands for social justice, but all Minister of the Interior Liao Liou-yi (廖了以) can say is, “better luck next time.”
Even in the US, which always has stressed the importance of free markets and a free economy, lawmakers managed to squeeze measures to benefit the disadvantaged and the middle classes into its bailout plan. It makes you wonder whether Taiwan’s government — which stressed liberalization and deregulation when it took office — cares about growing income disparity nationwide and whether it has heard the complaints of the disadvantaged and the middle classes who lack the political strength to challenge the government’s financial and economic policies.
US President Donald Trump has gotten off to a head-spinning start in his foreign policy. He has pressured Denmark to cede Greenland to the United States, threatened to take over the Panama Canal, urged Canada to become the 51st US state, unilaterally renamed the Gulf of Mexico to “the Gulf of America” and announced plans for the United States to annex and administer Gaza. He has imposed and then suspended 25 percent tariffs on Canada and Mexico for their roles in the flow of fentanyl into the United States, while at the same time increasing tariffs on China by 10
Trying to force a partnership between Taiwan Semiconductor Manufacturing Co (TSMC) and Intel Corp would be a wildly complex ordeal. Already, the reported request from the Trump administration for TSMC to take a controlling stake in Intel’s US factories is facing valid questions about feasibility from all sides. Washington would likely not support a foreign company operating Intel’s domestic factories, Reuters reported — just look at how that is going over in the steel sector. Meanwhile, many in Taiwan are concerned about the company being forced to transfer its bleeding-edge tech capabilities and give up its strategic advantage. This is especially
US President Donald Trump last week announced plans to impose reciprocal tariffs on eight countries. As Taiwan, a key hub for semiconductor manufacturing, is among them, the policy would significantly affect the country. In response, Minister of Economic Affairs J.W. Kuo (郭智輝) dispatched two officials to the US for negotiations, and Taiwan Semiconductor Manufacturing Co’s (TSMC) board of directors convened its first-ever meeting in the US. Those developments highlight how the US’ unstable trade policies are posing a growing threat to Taiwan. Can the US truly gain an advantage in chip manufacturing by reversing trade liberalization? Is it realistic to
Last week, 24 Republican representatives in the US Congress proposed a resolution calling for US President Donald Trump’s administration to abandon the US’ “one China” policy, calling it outdated, counterproductive and not reflective of reality, and to restore official diplomatic relations with Taiwan, enter bilateral free-trade agreement negotiations and support its entry into international organizations. That is an exciting and inspiring development. To help the US government and other nations further understand that Taiwan is not a part of China, that those “one China” policies are contrary to the fact that the two countries across the Taiwan Strait are independent and
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