The Chinese Nationalist Party (KMT) is again softening its attitude toward the much-maligned capital gains tax on securities investments, so KMT officials and lawmakers are looking for another excuse to explain their policy flip-flops over the tax.
This time, the concession came from the KMT caucus, which on Friday announced that the removal of the capital gains tax was the “direction” it would be taking, saying that the levy was already part of the securities transaction tax.
If the KMT caucus’ decision passes another round of cross-caucus negotiation today and wins support from opposition party legislators in coming days, it would represent the fifth adjustment to the tax in three years, while returning the capital gains tax policy to where it was in 2012.
For all the arguments that supporters and foes of the tax have made, the key issue is that the tax ensures the principles of social justice and fairness.
A well-designed tax scheme on securities investments should also promote healthy development in capital markets while discouraging speculation.
However, the local stock market is still reeling from the government’s decision to resume the capital gains tax three years ago: A widely expected annual tax revenue of NT$6 billion to NT$11 billion (US$182.33 million to US$334.27 million) from the capital gains tax has not materialized, while total capitalization of the local stock market has shrunk by NT$3 trillion in the past three years and revenue from the securities transaction tax was cut by NT$24.8 billion per year on average due to dwindling turnover.
Several Cabinet officials have voiced their support for abolishing the tax, saying it would alleviate tax burdens on stock investors and help revitalize a listless market. Stock investors have the right to expect something back from the market, but they have been rewarded with much lower returns than China and Hong Kong in recent years.
However, arguments by KMT officials and lawmakers are weak — the regulatory pendulum should not be allowed to swing back and forth when under pressure. Rather, the KMT aims to abolish this tax ahead of January’s presidential and legislative elections in a bid to win votes.
The fiasco over the capital gains tax resembles the situations faced by President Ma Ying-jeou’s (馬英九) administration in pushing for other reforms, ranging from the adjustment of fuel and electricity rates to the pension system overhaul to the fair distribution of wealth, in which the government’s hastiness in pushing through its policy objectives only resulted in serious objections from the public, with the final policies being watered down to a symbolic gesture of promises made by Ma when he came to power in 2008.
A wrong policy is far worse than corruption. However, who made the capital gains tax a bad policy and how has the issue degenerated into a brawl in the legislature?
The path to reform is endless, but along the way, greater space for discussion is necessary to reach a consensus, and a thorough consideration of potential impacts is the key to a successful execution of such reforms.
The pandemonium surrounding the capital gains tax is a case of irresponsible policymaking and careless leadership.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
Sasha B. Chhabra’s column (“Michelle Yeoh should no longer be welcome,” March 26, page 8) lamented an Instagram post by renowned actress Michelle Yeoh (楊紫瓊) about her recent visit to “Taipei, China.” It is Chhabra’s opinion that, in response to parroting Beijing’s propaganda about the status of Taiwan, Yeoh should be banned from entering this nation and her films cut off from funding by government-backed agencies, as well as disqualified from competing in the Golden Horse Awards. She and other celebrities, he wrote, must be made to understand “that there are consequences for their actions if they become political pawns of
RSS