In online bidding held by the Taipei City Government for “lucky” license plate numbers, a businessman spent NT$3.589 million to pick up “8888-88.” During an anniversary sale in Taipei 101 Mall, nine shoppers each spent more than NT$10 million, and another spent NT$50 million, at a single store. With some enjoying such frivolous, audacious luxury and others getting by just barely, or not at all, there is little surprise in the spread of the “Occupy” protests.
Even before the beginning of the now weeks-long rally on Wall Street, disappointment in recovery from the recession and the ever-widening wealth gap manifested themselves in the London riots. Other forms of marginalization and cultural degeneration were also to blame for the violence, however, an even remote presence of economic equality may have prevented the riots altogether.
The rich themselves can’t be blamed for being born already, or becoming, rich. As one of the founders of HTC Corp., Cher Wang has created value both in terms of money and technology, and now with her husband has a combined worth of NT$266 billion. Similarly Warren Buffet has a net worth of $39 billion. Put in the local currency, that is a nearly unimaginable NT$1.18 trillion. Buffet knows, and admits, that this is scandalous, and through philanthropy and lobbying is trying to do something about it. Buffet encourages fellow millionaires and billionaires to make pledges to donate much of their money, and has ridiculed the fact that his tax rate is lower than his maid’s.
The best we can hope for right now is not for everybody to lead lives on par with those of Wang and Buffet, but to help those who are suffering. In Taiwan we are confronted with such scenes every day, be it on the street or in a newspaper. Would it be fair for a single person to control 99 percent of the nation’s wealth, and for every other citizen to live in squalor? No ― thus the taxing, or just simply taking the money, of this person would clearly be a moral necessity. Once this is accepted the question becomes what tax rates are acceptable for whom. To put it in the blunt phrasing of author Sam Harris: “How much wealth can one person be allowed to keep?”
The highest tax bracket in Taiwan is for top-tier earners making over NT$4.23 million a year. The rate is 40 percent, which is similar to other developed nations. In the U.S. the maximum rate is 35 percent (though this can be lowered through good accounting), in the U.K. it is 40 percent, and in Australia, 45 percent. Would it be immoral for the Taiwan government to tax somebody such as Cher Wang a higher rate? A 5-percent increase might not be difficult for the government to pass, but may be too small to make a difference. What if the richest of the rich were taxed at 50 percent? Or higher? If tax brackets like these faced entrepreneurs like Steve Jobs or Bill Gates, would they have given up their dreams and efforts? Of course not. Microsoft, Apple and indeed HTC would still be here. Tax is only one of the considerations for businesses in their choice of headquarters. A fair, transparent society with a robust economy and strong talent base will attract entrepreneurs.
Income tax reform is not a cure-all, but it is not only a Band-Aid either. It could be seen as a start for a move toward a society in which people are allowed to get rich ― but only in fair ways ― and in which the rich will contribute to the society that helped them realize their dreams. After all, iPhones, did not simply materialize from Jobs’ fabulous imagination. People had to work hard to make the iPhone happen.
There will be uneasy questions. Who gets to decide how much is too much? How do we decide to whom the money is redistributed? How do we provide help and assistance without turning into a welfare nation of entitled brats? Some we can answer now; some only though trial and error. Their existence is not an argument for leaving things as they are, but for reform. At a time when a businessman can spend millions on a license plate, yet 70-year-old women ride rusty carts stacked with cardboard boxes just to survive, there is no excuse for inaction.
