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Candidates talk cautiously about raising taxes for the wealthy

2011/12/17 18:45:02

Taipei, Dec. 17 (CNA) The presidential candidates of Taiwan's two major political parties on Saturday talked cautiously about collecting more tax from the well-to-do if they win January's election, while the minor opposition party's aspirant warned that the nation's debt has grown into a "national security issue."

President Ma Ying-jeou of the Kuomintang, who is seeking four more years of mandate, said "taxing the rich more" is the right direction, but caution must be used when considering taxing them on their capital gains.

"We have to see if collecting capital gains tax would really reach our goal," Ma said during a televised debate at the Public TV Service, the second and final round among the three candidates.

He and the two other candidates were replying to a question from a civic group leader who asked them, if elected, will they increase rich people's tax burden and shelter the salaried class from shouldering more of one.

Ma said during his term of office, which began in 2008, the government has lowered the tax burden for wage and salary earners, saving them a total of more than NT$50 billion.

While agreeing to change the tax system in such a way as to collect more tax money from the rich, he called for caution over whether it is a good idea to reach that goal by launching the capital gains tax.

Also sounding a cautious note over initiating the capital gains tax was Democratic Progressive Party's (DPP) Chairwoman Tsai Ing-wen, who put it in the context of "reviewing the alternative minimum tax" so that the taxable level of capital gains could be "reasonably adjusted."

Currently, Taiwan does not tax capital gains, in spite of advocates calling repeatedly for the government to do so.

Tsai acknowledged that one of the biggest problems facing Taiwanese society is how to "increase the share of capital gains in the overall tax revenue."

She boasted that when the DPP was in power from 2000 to 2008, it had established the alternative minimum tax system under which wealthy people must pay tax on their total income after deducting some exemptions.

She added that taxing housing units not used by owners based on their market prices -- rather than on the government's published assessed prices -- is also a system worth considering.

"The point is to force those who have made handsome profits from real estate transactions to pay more from their capital gains," she said.

James Soong of the People First Party said the unfair tax system has always been high on the list of people's grievances, mainly because all changes to the tax code have tended to "favor the well-to-do," while not a cent of the salaried class's taxable income can be exempt from taxation.

He promised to "build fiscal discipline" if he becomes president next year and lead a tax reform under which laws will be enacted to limit government debt and balance budgets, so the country's fiscal deficits will not balloon.

He said the government's debts have grown so much that they have become a "national security issue" that must be dealt with immediately before it plunges the country into instability.

Polls show that Ma and Tsai are locked in a close battle with Soong trailing in a distant third.

(By Sherry Tang, Tseng Ying-yu, Chen Pei-huang and S.C. Chang)