All Eyes are on the Legislative Yuan

All Eyes are on the Legislative Yuan
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation 
December 25, 2014

Executive Summary: Today, DPP Legislators Wu Ping-rui and Hsueh Ling will hold a public hearing in the Legislative Yuan. They will discuss the sixth of 66 articles of the Income Tax Act. This part of the tax law concerns the “unified tax". The third reading was held in May of this year. It is expected to go into effect in January of next year, In recent years, certain provisions have helped reduce the gap between the rich and the poor. But legislators are now trying to overturn them. The "halving of the deductible dividend rate" requirement was changed to next year's new surplus. This is no trivial matter. If it passes, it will mean a 14 year moratorium.

Full Text Below:

Today, DPP Legislators Wu Ping-rui and Hsueh Ling will hold a public hearing in the Legislative Yuan. They will discuss the sixth of 66 articles of the Income Tax Act. This part of the tax law concerns the “unified tax". The third reading was held in May of this year. It is expected to go into effect in January of next year, In recent years, certain provisions have helped reduce the gap between the rich and the poor. But legislators are now trying to overturn them. The "halving of the deductible dividend rate" requirement was changed to next year's new surplus. This is no trivial matter. If it passes, it will mean a 14 year moratorium.

The nine in one elections have just ended. DPP Chairman Tsai Ing-wen gave a victory speech. In it she promised "severe disciplinary measures for political corruption” and an “absolute determination to fulfilling public expectations.” Her words were still ringing in our ears when green camp legislators went on the offensive, and gave tax cuts to the rich. The DPP's practice of "saying one thing while doing another” should raise serious concerns among Taiwan public.

Allow us to help the reader in understanding the amendment to Income Tax Law 266. Originally taxes on for-profit enterprises and consolidated personal income were levied separately. In 1992, then Finance Minister Chiu Cheng-hsiung proposed a "unified tax." This amended tax law would allow "personal dividend income" to be included in the consolidated income declaration. One could then deduct the full amount of "for-profit enterprise income" paid by one's company, call it a combined "comprehensive personal income tax” and "company profits." This amendment reduced the government's annual tax revenue by nearly 100 billion NT.

This “two taxes in one” was indeed used by certain European and American countries. But a growing number of countries have dispensed with such a system. They no longer see business taxes and income taxes as “redundant". Also, many countries are experiencing increasing inequality. They are no longer willing to grant the wealthy tax credits on dividend income. As a result, they have modified the unified tax system. They have returned to the old "two tax system with no credits". In the first half of this year, the legislature discussed whether the unified tax regime should be abolished. Eventually it compromised, and allowed "half credits". This amendment has already been compromised by Taiwan's fiscal constraints and the need to raise taxes. Who knew that the consortia and the ultra wealthy are still dissatisfied. Shameless politicians still shield the rich. The new law has yet to go into effect, and it has already been subverted.

Who benefits from the subversion of the 66 article "Income Tax Act"? Why wealthy tycoons, of course. Statistics show that the vast majority of them, over 51.7%, qualify for this deduction. The lowest are in the 30% marginal tax rate bracket. Some are in the 40% marginal tax rate bracket. Their taxes run as high as 40 billion NT. Therefore when lobbyists attempt to overturn the law, we are not talking about middle class taxpayers who taxes run in the tens of dollars, or hundreds of dollars. But approximately 10,000 ultra wealthy individuals. Taiwan's increasingly unequal distribution of income is an indisputable fact. Domestic wages have remained frozen for the past ten years. Many middle class people cannot afford to buy a house. Young people cannot afford to have children, so they don't. This is one of the reasons for ruling party's recent defeat. Now these legislators are shieldig the ultra rich. These legislators dared to overturn a fair tax reform plan that took ten years to pass.

Rhetoric about legislators shielding the rich is not worth refuting. These legislators say they want to implement the tax law only after "company earnings have been issued." But this will probably lead to a 14 year delay. It is the same as no implementation whatsoever. Thes legislators say they initially intended full deductions for retained earnings, but the government would have to implement "trust protection". This is “Kingdom of Formosa” logic. Governments the world over raise or lower tax rates routinely. None of them ever talk about delays in order to implement "trust protection". Those who want tax cuts to enrich themselves always say, "We can expand the tax base with lower tax rates, and increase investments." But as everyone knows, that was the rationale 16 years ago for the "unified tax". In fact, tax cuts did not increase investment in Taiwan. Instead investments significantly declined. These self-enriching lies have been laid bare. Why should anyone still believe them?

Today is an important day. The people must look at the spectacle in the legislature and ask themselves which legislators are on the side of the 99%, and which are on the side of the 1%. The people must look at whether those spouting fairness and justice before the election are phonies. The same is true of the capital gains tax "large investors clause". After duping you into voting for them, will they revert to business as usual? The people will see whether Tsai Ing-wen's victory speech was straight from the heart, or mere feel good rhetoric. The people will see whether the Finance Directorate, and even Executive Yuan President Mao has a backbone. The people will see whether they repudiate the wealthy and humiliate the legislators, or whether they will say, "We respect the decision of the legislature."

The people are looking at what is going on in the Legislative Yuan, and they will not forget.

今天立法院如何發展，全民都在看
【聯合報╱社論】
2014.12.24 01:52 am

民進黨立委吳秉叡、薛凌今天將在立法院召開公聽會，討論《所得稅法》六十六條之六的再修正案。這項稅法是關於「兩稅合一」的部分扣抵，今年五月才三讀通過，預訂明年一月上路，是近年來國內稍有助於抑制貧富不均的條文。而立委企圖翻盤，將「股利扣抵率減半」的規定改為明年起的新增盈餘才適用；別看這麼一個小小動作，一旦得逞，將造成形同「緩課十四年」的結局。

九合一選舉剛結束，民進黨主席蔡英文的勝選感言「嚴厲管控政風紀律，絕不能辜負人民期待」言猶在耳，而綠營立委卻已忙不迭地在國會發動攻勢，要為有錢富人護航減稅。這種「明修棧道、暗渡陳倉」的作法，值得台灣人民嚴重關切。

先讓我們幫讀者了解一下所得稅法六十六條的修正情況。原本，我國稅法對於公司營利事業所得以及個人綜合所得是都要獨立課稅的。民國八十七年，當時的財政部長邱正雄提出「兩稅合一」方案，修改了該條稅法，容許「個人股利所得」於申報綜合所得稅時，得以全額扣抵公司已繳之「營利事業所得」，稱為「個人綜所稅」與「公司營所稅」之合一。這項修法，讓國家每年減少近一千億元稅收。

這類兩稅合一制度，當年確實有一些歐美國家採用；但發展至今，已經有越來越多的國家在租稅邏輯上做了修正，不再將營所稅與綜所稅視為「重複」課稅。此外，各國也因為貧富不均情況惡化，也不願意再為以股利為所得大宗的富人抵免稅負，於是紛紛又修改兩稅合一，重回「兩稅皆課、不得抵減」的舊制。今年上半年，我國立法院才就兩稅合一是否應廢除做過討論，最後決定採取折衷制，容許「半數抵減」。這項修正案，從台灣財政拮据、有必要加稅的情況看來，已經是妥協的最大底限；沒想到，財團富人仍然貪婪不滿，無恥政客還是要替富人護航，竟然敢在新法尚未上路就急急翻案。

《所得稅法》六十六條之一翻案，對誰有好處呢？當然是大富豪。統計資料顯示，絕大多數（超過五十一．七％）適用此扣抵的案件，都是邊際稅率超過卅％的人；而其中適用四十％邊際稅率的，稅額甚至高達四百億元。因此，遊說要翻案的，絕對不是那些只差幾十元、幾百元稅金的中產階級，而是為數約僅萬人的大富豪。台灣所得分配日益不均，已是不爭的事實。國內十幾年來薪資凍漲，許多中產階級買不起房子，年輕人養不起孩子、因此不敢生孩子等情況，更是這次執政黨敗選的原因之一。今天，我們就要看看是哪些立委在立法院為富豪護航，是哪些立委敢把一項十幾年來好不容易修正的公平稅改方案推翻。

為富人護航立委的說詞，其實不值一駁。他們說，要把稅法修正案「等公司保留盈餘發完」才實施；但這一拖，大概拖延十四年，講白了就跟「不再實施」沒什麼兩樣。他們說，保留盈餘原本有全額扣抵的期待，政府必須貫徹「信賴保護」；但這是天龍國的邏輯，全世界各國稅率調高調低年年發生，從來沒有聽說過要為「信賴保護」而延緩或不實施。降稅自肥的人總是說：「稅率低可以擴大稅基、增加投資」，殊不知，這已經是十六年前推「兩稅合一」時的老梗；事實上，減稅之後台灣的投資並未增加，反而大幅衰退到慘不忍睹。撒謊自肥而被戳穿已如前述，今天人民還要再相信他們的謊言嗎？

今天是一個重要的日子。人民一定要看看今天立法院這一幕，究竟是哪些立法委員站在九十九％這一邊、哪些人站在一％那一邊。人民必須看看，是不是選前所有關於公平正義的修法都是假的，就像證所稅的「大戶條款」一樣，騙完選票，就回復原狀。人民也會看看，蔡英文的勝選感言是不是肺腑之言，或者只是「一篇動人演說稿」。人民也會看看財經首長、甚至行政院毛院長的骨氣，看他們是否任憑富豪與立委羞辱，還能死皮賴臉地說「我們尊重大院的決定」。

今天立法院如何發展，全民都在看，也都會記住的。