Clipping Board » Other ─ There is currently no cure for this disease of the country and society...
Update Date: 2009/06/20 02:47
By Xie Jinfang / Taipei Report
The wealth gap in Taiwan is like a runaway horse, widening uncontrollably! According to the latest statistics from the Fiscal Information Agency of the Ministry of Finance, based on dividing the 5.37 million tax-filing households into 20 income brackets, the average income of the top 5% in the pyramid in 2007 was over NT$4.28 million, while the bottom 5% averaged only NT$69,000—a staggering 62-fold difference, marking a historic high.
Looking back ten years to 1998, the gap between the richest 5% and the poorest 5% in Taiwan was 32-fold. Over the past decade, this income disparity has surged from 32 times to 62 times, with no signs of the worsening trend slowing down.
Taiwan experienced a severe economic recession in 2001, with GDP contracting by 2.1%. That year, the income gap stood at 42 times. In the following years, although Taiwan's economy returned to positive growth, the wealth gap continued to escalate.
According to the Directorate-General of Budget, Accounting, and Statistics' household income survey, over the past decade (from 1998 to 2007), the average disposable income of all households grew by 5.49%. When divided into quintiles, the lowest income group saw a mere 0.41% increase in income over the decade—almost no growth—while the highest income group grew by 8.18%, a significant disparity.
Professor Lin Wanyi from the Department of Social Work at National Taiwan University pointed out that the survey reveals a gradual widening of the wealth gap over the past decade, primarily due to rapid income growth among the wealthy while the poor saw minimal increases, exacerbating the disparity over time.
Lin Wanyi noted that, over the long term, both the Fiscal Information Agency's tax statistics and the Directorate-General's surveys indicate a clear trend of widening income inequality in Taiwan. The financial crisis has further worsened the situation, with soaring unemployment rates, declining wages for the working class, and ill-advised tax cuts likely to deepen the wealth gap.
Professor Zeng Juwei from the Department of Public Finance at National Chengchi University remarked that the government's earlier implementation of the Alternative Minimum Tax was intended to redistribute income but failed to achieve the expected results.
Additionally, the Ma administration's tax relief measures in response to the financial crisis primarily benefited the wealthy, further worsening income inequality. Although the Executive Yuan raised deductions, exemptions, and lowered income tax rates this year, these measures had little redistributive effect, as capital gains—the largest source of income—remain untaxed, a key factor in tax inequity and worsening income distribution.
He emphasized that in recent years, the government has relied mainly on social welfare for income redistribution, with taxation playing a negligible or even counterproductive role. Given the worsening reality of income inequality, the Ma administration can no longer afford to ignore the issue.
Source: http://tw. news. yahoo. com/ article/ url/ d/ a/ 090620/ 4/ 1llk9. html
Update Date: 2009/06/20 02:47
Special Report by Xie Jinfang
The rapid deterioration of income distribution in Taiwan over the past decade is truly alarming. However, the widening wealth gap during this period is the bitter fruit of long-term neglect by both the Blue and Green administrations.
Regardless of which party has been in power in recent years, none has been willing to squarely address the issue of Taiwan’s growing wealth disparity. In reality, whether it’s the comprehensive income tax data from the Fiscal Information Agency or the household income and expenditure surveys from the Directorate-General of Budget, Accounting, and Statistics, these only reveal the tip of the iceberg. These figures severely underestimate the true extent of Taiwan’s wealth gap.
First, while the individual comprehensive income tax data covers over five million households and is relatively comprehensive, it primarily focuses on "taxable income." However, Taiwan’s tax system harbors many inequities—for instance, capital gains and overseas income are tax-exempt. These major sources of income for the wealthy are not included in the tax data. Additionally, the genuinely poor are often exempt from filing taxes, leading to a significant underestimation of the true wealth gap in these income distribution statistics.
Second, the Directorate-General of Budget, Accounting, and Statistics conducts household income and expenditure surveys by sampling over 13,000 households. Beyond the inherent blind spots in survey methodology—such as the difficulty of reaching the truly wealthy or the poorest—the questionnaire design also fails to account for large income sources like profits from stock market transactions or real estate dealings. This further obscures the reality of the wealth gap.
Why has this worsening trend remained unchecked over the past decade? What factors have driven the widening wealth gap, making the rich richer and the poor poorer?
Broadly speaking, there are two major factors: first, the impact of globalization and technological changes, and second, policy biases that have led to tax inequities, exacerbating income inequality.
However, according to Nobel Prize-winning economist Paul Krugman, political factors are actually the primary driver. Krugman, a staunch critic of the Republican Party, argues that the timeline of political and economic changes shows that politics leads the shift. The U.S. saw a marked rise in inequality in the 1980s, and during George W. Bush’s administration, multiple tax cuts favoring the wealthy further worsened economic disparities.
In Taiwan, the worsening wealth gap over the past decade is closely tied to successive administrations introducing tax cuts that disproportionately benefit the wealthy. Scholars Lin Wan-yi and Tseng Chu-wei, from the fields of social welfare and public finance respectively, have pointed out that many of the tax relief measures implemented by the Ma administration in response to the financial crisis primarily advantaged the wealthy. This naturally undermined the redistributive function of taxation and even exacerbated income inequality.
Over the past decade, as the poor have grown poorer and the rich richer, the Ma administration, which prides itself on "sharing the hardships of the people," must take concrete action to reverse this rapid deterioration in income distribution and prevent the poor from sinking further into despair.
Source: http://tw. news. yahoo. com/ article/ url/ d/ a/ 090620/ 4/ 1llk2. html
Wealth Gap Hits Record High, Widens to 62 Times
By Xie Jinfang / Taipei Report
The wealth gap in Taiwan is like a runaway horse, widening uncontrollably! According to the latest statistics from the Fiscal Information Agency of the Ministry of Finance, based on dividing the 5.37 million tax-filing households into 20 income brackets, the average income of the top 5% in the pyramid in 2007 was over NT$4.28 million, while the bottom 5% averaged only NT$69,000—a staggering 62-fold difference, marking a historic high.
Looking back ten years to 1998, the gap between the richest 5% and the poorest 5% in Taiwan was 32-fold. Over the past decade, this income disparity has surged from 32 times to 62 times, with no signs of the worsening trend slowing down.
Taiwan experienced a severe economic recession in 2001, with GDP contracting by 2.1%. That year, the income gap stood at 42 times. In the following years, although Taiwan's economy returned to positive growth, the wealth gap continued to escalate.
According to the Directorate-General of Budget, Accounting, and Statistics' household income survey, over the past decade (from 1998 to 2007), the average disposable income of all households grew by 5.49%. When divided into quintiles, the lowest income group saw a mere 0.41% increase in income over the decade—almost no growth—while the highest income group grew by 8.18%, a significant disparity.
Professor Lin Wanyi from the Department of Social Work at National Taiwan University pointed out that the survey reveals a gradual widening of the wealth gap over the past decade, primarily due to rapid income growth among the wealthy while the poor saw minimal increases, exacerbating the disparity over time.
Lin Wanyi noted that, over the long term, both the Fiscal Information Agency's tax statistics and the Directorate-General's surveys indicate a clear trend of widening income inequality in Taiwan. The financial crisis has further worsened the situation, with soaring unemployment rates, declining wages for the working class, and ill-advised tax cuts likely to deepen the wealth gap.
Professor Zeng Juwei from the Department of Public Finance at National Chengchi University remarked that the government's earlier implementation of the Alternative Minimum Tax was intended to redistribute income but failed to achieve the expected results.
Additionally, the Ma administration's tax relief measures in response to the financial crisis primarily benefited the wealthy, further worsening income inequality. Although the Executive Yuan raised deductions, exemptions, and lowered income tax rates this year, these measures had little redistributive effect, as capital gains—the largest source of income—remain untaxed, a key factor in tax inequity and worsening income distribution.
He emphasized that in recent years, the government has relied mainly on social welfare for income redistribution, with taxation playing a negligible or even counterproductive role. Given the worsening reality of income inequality, the Ma administration can no longer afford to ignore the issue.
Source: http://tw. news. yahoo. com/ article/ url/ d/ a/ 090620/ 4/ 1llk9. html
Policies Favor the Rich, Widening Wealth Gap
Special Report by Xie Jinfang
The rapid deterioration of income distribution in Taiwan over the past decade is truly alarming. However, the widening wealth gap during this period is the bitter fruit of long-term neglect by both the Blue and Green administrations.
Regardless of which party has been in power in recent years, none has been willing to squarely address the issue of Taiwan’s growing wealth disparity. In reality, whether it’s the comprehensive income tax data from the Fiscal Information Agency or the household income and expenditure surveys from the Directorate-General of Budget, Accounting, and Statistics, these only reveal the tip of the iceberg. These figures severely underestimate the true extent of Taiwan’s wealth gap.
First, while the individual comprehensive income tax data covers over five million households and is relatively comprehensive, it primarily focuses on "taxable income." However, Taiwan’s tax system harbors many inequities—for instance, capital gains and overseas income are tax-exempt. These major sources of income for the wealthy are not included in the tax data. Additionally, the genuinely poor are often exempt from filing taxes, leading to a significant underestimation of the true wealth gap in these income distribution statistics.
Second, the Directorate-General of Budget, Accounting, and Statistics conducts household income and expenditure surveys by sampling over 13,000 households. Beyond the inherent blind spots in survey methodology—such as the difficulty of reaching the truly wealthy or the poorest—the questionnaire design also fails to account for large income sources like profits from stock market transactions or real estate dealings. This further obscures the reality of the wealth gap.
Why has this worsening trend remained unchecked over the past decade? What factors have driven the widening wealth gap, making the rich richer and the poor poorer?
Broadly speaking, there are two major factors: first, the impact of globalization and technological changes, and second, policy biases that have led to tax inequities, exacerbating income inequality.
However, according to Nobel Prize-winning economist Paul Krugman, political factors are actually the primary driver. Krugman, a staunch critic of the Republican Party, argues that the timeline of political and economic changes shows that politics leads the shift. The U.S. saw a marked rise in inequality in the 1980s, and during George W. Bush’s administration, multiple tax cuts favoring the wealthy further worsened economic disparities.
In Taiwan, the worsening wealth gap over the past decade is closely tied to successive administrations introducing tax cuts that disproportionately benefit the wealthy. Scholars Lin Wan-yi and Tseng Chu-wei, from the fields of social welfare and public finance respectively, have pointed out that many of the tax relief measures implemented by the Ma administration in response to the financial crisis primarily advantaged the wealthy. This naturally undermined the redistributive function of taxation and even exacerbated income inequality.
Over the past decade, as the poor have grown poorer and the rich richer, the Ma administration, which prides itself on "sharing the hardships of the people," must take concrete action to reverse this rapid deterioration in income distribution and prevent the poor from sinking further into despair.
Source: http://tw. news. yahoo. com/ article/ url/ d/ a/ 090620/ 4/ 1llk2. html