KMT’s Hung pro­poses tax- de­ductible in­crease in wages to boost growth


Kuom­intang ( KMT) 2016 pres­i­den­tial can­di­date Hung Hsiu- chu ( ) pro­posed tax-de­ductible wage in­creases yesterday in a pol­icy out­line de­signed to bring the is­land out of its eco­nomic dol­drums.

Hung pro­posed the “in­crease work­ers wages, cor­po­rate tax re­bate” at the party’s Na­tional Pol­icy Foun­da­tion think tank, which is headed by KMT Chair­man Eric Chu. Un­der a three-year stag­gered rate scheme, small and medium-sized en­ter­prises could ap­ply for re­bates amount­ing to 200 per­cent of the value of wage in­creases ap­plied to en­trylevel em­ploy­ees in the first year. Dur­ing the sec­ond and third years, the re­bate rate would be ad­justed to 160 per­cent and 130 per­cent, re­spec­tively.

For ex­am­ple, a com­pany rais­ing the wage of a worker by NT$10,000 an­nu­ally could file for a re­bate of NT$20,000 in the first year, NT$16,000 in the sec­ond year and NT$13,000 in the third.

A tax re­bate for busi­nesses would also ap­ply for those who hire un­em­ployed peo­ple un­der the age of 29, equal­ing the wage mul­ti­plied by 150 per­cent. Hung stated that un­em­ploy­ment rates for 20- 24 year old work­ers stands at 12 per­cent, while ex­ceed­ing 6 per­cent for those aged 25-29.

Hung said the mea­sures were com­mon sense and ad­dress the eco­nomic down­turn, and that the way to in­crease do­mes­tic con­sump­tion is to in­crease wages.

KMT Leg­is­la­tor Lai Shyh-bao ( ) called on the Demo­cratic Pro­gres­sive Party (DPP) not to block the pro­posal for “elec­toral con­sid­er­a­tions.” He noted that the re­cently passed laws to pro­mote wage in­creases ( ) au­thored by the KMT had spe­cific ar­ti­cles ad­dress­ing the plight of small and medi­um­sized firms, but were hence blocked by the op­po­si­tion party.

The gov­ern­ment re­leased dis­ap­point­ing fig­ures at the end of last week show­ing that eco­nomic growth rates would slow into next year.

DPP De­rides Plan

Mean­while Shih Ke-he ( ), the DPP’s deputy of pol­icy ad­min­is­tra­tion, said that scholars have al­ready dis­counted the ef­fi­cacy of tax-re­duced wage schemes. Shih quoted Academia Sinica aca­demi­cian and for­mer Na­tional Science Coun­cil Min­is­ter Cyrus Chu ( ) who said such ideas were “lazy and pop­ulist” in ori­en­ta­tion. Shih stated that Hung’s pro­posal may lead to “fake wage in­creases and real tax cuts,” and that gov­ern­ment moves to de­crease cor­po­rate taxes are not an ap­pro­pri­ate means to in­crease wages.

Shih said that the DPP’s plan for ad­dress­ing wage in­creases in­volves ad­dress­ing and “up­grad­ing” Tai­wan’s pro­duc­tion struc­ture in or­der to es­cape wage stag­na­tion. He in­di­cated that the re­cent wage in­crease laws passed by the rul­ing party would prob­a­bly lead to lit­tle change for en­try- level wage earn­ers, but would in­stead see in­creases for man­agers who will use loop­holes to in­crease their own earn­ings.


Kuom­intang (KMT) pres­i­den­tial can­di­date Hung Hsiu-chu ( ) is shown at a press con­fer­ence at KMT party head­quar­ters, yesterday. Hung pro­posed fur­ther tax breaks for busi­nesses that in­crease wages for their em­ploy­ees on Sun­day.

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