Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Taiwan’s Electronics Elite Welcome Higher Taxes For The Rich
The most vocal supporters of higher taxes for the rich are . . . . . .the rich.
Last week an increase in tax rates for the rich in Taiwan was publicly welcomed by the bosses of TSMC, Foxconn and Delta Electronics – Morris Chang, Terry Gou and Bruce Cheng.
Under the new tax regime 1.5% of taxpayers, about 10,000 people with incomes of over $333,000, will pay tax at 45% up from the current 40%. Average earners will pay less tax.
In Taiwan, the average income of the bottom 5% is $1,500 while the average income of the top 5% is $150,000. Recently there have been protests in Taiwan about growing inequality.
A couple of years back Warren Buffett proposed that: “We need Congress to enact a minimum tax on high incomes. I would suggest 30% of taxable income between $1 million and $10 million, and 35% on amounts above that.”
Of the 400 richest Americans, “more than a quarter paid less than 15% of their take in combined federal income and payroll taxes,” said Buffett, “half paid less than 20% and — brace yourself — a few actually paid nothing.”
Buffett pointed out that between 1951 and 1954 the capital gains rate was 25% and marginal rates on dividends reached 9% “in extreme cases” and that, in the years from 1956 to 1969, the top marginal rate was 70% and the tax rate on capital gains was 27.5%.
“Under those burdensome rates both employment and GDP increased at a rapid clip,”said Buffett, “the middle class and the rich alike gained ground.”
In America the stumbling block is the Republicans in Congress who give sectarian advantage a higher priority than fair government.