During his visit to Taiwan last week, Thomas Piketty, in echoing the theme of his popular work Capital in the Twenty-First Century, pointed to the widening gap in wealth allocation worldwide, stressing that with taxation system failing to achieve wealth reallocation, wealth has become an inheritance, perpetuating the divide between the rich and the poor. He warned of the danger of reverting to the era of extreme wealth inequality during the 19th century, which prompted Karl Marx to author the Capital. The predicament plaguing the U.S. and Europe also exists in Taiwan. At odds with mainstream economic thought lauding free competition for its contribution to the maximum well-being in an economic society, the French economist believes capitalism is the main culprit for the wide wealth gap. Pikettys proposition echoes the calls of a number of economists in the last century, such as A. Marshall and J.G. Wicksell in late 1990s, urging effort to rectify the inequality under a capitalist society, including policy interference leading to transfer of income from the rich to the poor, for the betterment of the economic society. The calls for alleviation of the inequality problem via wealth reallocation has been sidelined over the past years, as mainstream free-market proponents argue that it will disappear naturally, along with further growth of economy, an assertion appearing to be at odds with the deteriorating inequality in recent years, as economy expands. In Taiwan, for instance, following series of tax cuts in recent years, the fruits of its economic development over the past 20 years has been in the firm grip of the winning circle, entirely beyond the reach of most other members of the society. The grave inequality has been largely neglected, due to absence of data on wealth gap, which has often been confused with income gap. According to the survey on national wealth in 1991, wealth gap between the 20% richest households and the 20% poorest ones was 16.8 times in the year, although the income gas was only less than five times. We dont have a clear picture of the gravity of Taiwans wealth gap now, due to the absence of such data for the past 20 years, since the government didnt conduct any survey on wealth gap after 1991. Due to the lack of such data, Piketty didnt include the status of Taiwan in his book. Despite the absence of survey data, most people have clearly sensed the widening wealth gap, as those on the tip of the wealth pyramid sport their luxurious lifestyle, to the envy to the great majority of the societys members, many of whom have witnessed their expulsion from the middle class. To fill the vacuum, we suggest the Executive Yuan form a cross-ministry panel, consisting of representatives from the Directorate General of Budget, Accounting, and Statistics, the Ministry of Finance, and the Financial Supervisory Commission for compiling statistics on wealth allocation. Without the statistical basis, any assertion by the government for improving the wealth gap is just empty talk. (Want Chinatimes)
Posted on: Thu, 18 Dec 2014 10:37:43 +0000
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