Taiwan said last Thursday it is considering a proposal by Terry Gou, head of the Foxconn group that makes gadgets for Apple and other top brands, to impose a special tax on the island’s super-rich.
The government will study a suggestion by the technology billionaire, who is worth $4.8 billion (€3.8 billion), to levy a “rich tax” on the 300 top earners – if the rich themselves agree, new finance minister Chang Sheng-ford said.
“We’ll be happy to look into it if the tax he has proposed gains consensus among the rich people,” Chang told a parliamentary session, without elaborating on how consensus would be measured.
Gou’s suggestion comes amid an emerging trend among Taiwan’s wealthiest to publicly signal growing social conscience, and has echoes of US President Barack Obama’s proposed “Buffett Rule”.
Samuel Yin, head of the sprawling Ruentex conglomerate, and Chang Yung-fa, the founder of aviation and shipping giant Evergreen, have both promised to donate most or all of their wealth to charity after they die.
The Buffett Rule was named after US billionaire investor Warren Buffett, who has publicly spoken out against being taxed at a lower rate than his secretary due to tax loopholes.
A bill based upon the rule, which proposes a minimum effective tax rate of 30 per cent on those who make more than $1 million (€803,000) a year, failed to pass the US Senate in April after being filibustered by Republican lawmakers.
Under Gou’s proposals, Taiwan’s top 100 richest would collectively pay Tw$10 billion (€268 million) a year, the 101 to 200 richest Tw$5bn (€134m) and the 201 to 300 richest Tw$3bn (€80m), providing the government with an additional Tw$18bn (€482m) annually.
Taiwan President Ma Ying-jeou is seeking ways to narrow a widening wealth gap – a platform he campaigned on when he was re-elected in January for a second and last term.
Last year, the government introduced a “luxury tax” on homes not permanently occupied by their owners in a bid to rein in property speculation and on high-end goods such as private jets, yachts, and golf club memberships.
More recently the Ma administration has attempted to impose a capital gains tax on the trading of stocks, bonds and derivatives.
However, the business community has criticised the tax for being badly timed, coming amid a slowing local economy, forcing the finance minister to resign last month.