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.
Hong Kong singer Andy Lau’s (劉德華) concert in Taipei tonight has been cancelled due to Typhoon Kong-rei and is to be held at noon on Saturday instead, the concert organizer SuperDome said in a statement this afternoon. Tonight’s concert at Taipei Arena was to be the first of four consecutive nightly performances by Lau in Taipei, but it was called off at the request of Taipei Metro, the operator of the venue, due to the weather, said the organizer. Taipei Metro said the concert was cancelled out of consideration for the audience’s safety. The decision disappointed a number of Lau’s fans who had
A tropical depression east of the Philippines became a tropical storm early yesterday, the Central Weather Administration (CWA) said, less than a week after a typhoon barreled across the nation. The agency issued an advisory at 3:30am stating that the 22nd tropical storm, named Yinxing, of the Pacific typhoon season formed at 2am. As of 8am, the storm was 1,730km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, with a 100km radius. It was moving west-northwest at 32kph, with maximum sustained winds of 83kph and gusts of up to 108kph. Based on its current path, the storm is not expected to hit Taiwan, CWA
Commuters in Taipei picked their way through debris and navigated disrupted transit schedules this morning on their way to work and school, as the city was still working to clear the streets in the aftermath of Typhoon Kong-rey. By 11pm yesterday, there were estimated 2,000 trees down in the city, as well as 390 reports of infrastructure damage, 318 reports of building damage and 307 reports of fallen signs, the Taipei Public Works Department said. Workers were mobilized late last night to clear the debris as soon as possible, the department said. However, as of this morning, many people were leaving messages
A Canadian dental assistant was recently indicted by prosecutors after she was caught in August trying to smuggle 32kg of marijuana into Taiwan, the Aviation Police Bureau said on Wednesday. The 30-year-old was arrested on Aug. 4 after arriving on a flight to Taiwan Taoyuan International Airport, Chang Tsung-lung (張驄瀧), a squad chief in the Aviation Police Bureau’s Criminal Investigation Division, told reporters. Customs officials noticed irregularities when the woman’s two suitcases passed through X-ray baggage scanners, Chang said. Upon searching them, officers discovered 32.61kg of marijuana, which local media outlets estimated to have a market value of more than NT$50 million (US$1.56
RSS