Presidential Leadership in Violating the Law

Presidential Leadership in Violating the Law
China Times editorial
translated by Bevin Chu
May 30, 2007

During the past week, the presidential office has trotted out an endless series of new financial policies. The newly formed Chang Chun-hsiung cabinet meanwhile, has aggressively carried out President Chen's orders. These new policies include: One, no limits on the number of times the land value incremental tax and the preferential tax rate for buildings for personal use may be applied within one's lifetime. Two, the government hopes, like Hong Kong, to eliminate inheritance taxes and gift taxes. Three, the government will continue promoting its Orwellian "Second Financial Reform" program. Four, suburbs, science parks, and farm land adjacent to high-speed rail line stations may be reclassified for residential use. These policies may sound innovative, but they are nothing more than the tired old game of reducing taxes while increasing spending, and "stealing from the taxpayers to buy off the voters." They amount to plugging new numbers into the same old formulas. They are exactly the same as the Welfare Subsidies for the Elderly and the Welfare Subsidies for Farmers trotted out a month ago, motivated entirely by election considerations.

In the past this kind of pork barrel vote buying tactic followed a fixed pattern. Usually ruling and opposition party lawmakers would submit a bill within the legislature, offering either expanded benefits or reduced taxes, while demanding an outrageous quid pro quo. Then the Ministry of Finance and the Executive Yuan would promptly respond. You demand a dollar? They offer fifty cents, cash on the barrel head. This time the situation is different. This time the ruling administration initiated the bidding process. The Ministry of Finance knew nothing about it in advance. After it received instructions from the Presidential Office, all it could do was improvise. The bargaining process however remained unchanged.

Chen Shui-bian says: No limits on the number of times the land value incremental tax and the preferential tax rate for buildings for personal use may be applied within one's lifetime. The Ministry of Finance responds by saying: It can be increased to three times within one's lifetime. Chen Shui-bian says: The government hopes, like Hong Kong, to eliminate inheritance taxes and gift taxes. The Ministry of Finance responds by saying: Inheritance tax and gift tax exemption rates may be raised to 10,000NT, and may be invoked before death.

Tax policy is complex. Forget major tax cuts, even minor changes in tax rates must normally undergo thorough study and debate. The professionalism of the Ministry of Finance is not the issue. The problem is these tax experts have been reduced to the status of Monday morning quarterbacks, kept in the dark until after the fact. Chen Shui-bian tosses out a tax cut or tax elimination bombshell, and all they can do is scramble in response.

We have analyzed the pros and cons many times. We have explained how inheritance and gift taxes are easily reduced but not so easily eliminated, how property taxes held reduce the gap between rich and poor, how annuities should not be increased each time an election rolls around. We have repeatedly stressed how reducing tax revenues while increasing social benefits can never successfully buy votes through pork barrel spending measures. The reason being that regardless which political party makes the proposal, the opposing political party can always raise the ante. In the end, they cancel each other out. The sole loser in the process is financial stability. Chen Shui-bian's proposals for the inheritance tax, for the reduction and even elimination of the land value incremental tax, will still have to undergo revision by the Legislative Yuan. It should be obvious that if the Executive Yuan sends the bill to the Legislative Yuan, Blue camp lawmakers will simply up the ante, and the DPP won't necessarily profit.

From the standpoint of ordinary people, recent financial and economic policies benefit the rich and harm the poor. They offer a multitude of advantages to the rich, but none to the ordinary wage earner. The amount of property held by the ordinary wage earner is limited. For them, current inheritance tax laws are appropriate. They aren't required to pay inheritance taxes anyway. Eliminating or reducing inheritance taxes benefits only the rich. Likewise, the price of housing has surged. Ordinary people are lucky to have a place to live. Even if they are able to change homes, they can't do so repeatedly. Therefore relaxing the standards for the preferential tax rate for buildings for personal use benefits only the rich.

Meanwhile, ordinary wage earners must pay income taxes on every penny they've earned with their blood, sweat, and tears. Tomorrow is the deadline for declaring one's Year 2006 income tax. Millions of ordinary taxpayers, despite government incompetence, rampant corruption, rising crime, and falling wages, will obediently turn their hard-earned money over to the Internal Revenue Service.

The ruling authorities repeatedly trample over the ordinary citizen. Not only does their tax reduction policy benefit only the rich, the government intends to use the taxpayers' hard-earned money to make up the shortfall caused by an improper increase in the minimum wage. The Council of Labor Affairs (CLA) has already decided to subsidize businesses that hire part-time workers. Workers who work at least three months, whose hourly wage is less than 95NT, will each receive a subsidy of 10NT per hour, for up to a year. The decision-making process was crude beyond belief, and as usual those victimized are ordinary citizens.

In the face of such pork barrel vote-buying tactics, will those in charge at the Ministry of Finance have the courage to stand their ground as professionals, and refuse to assume the role of puppets? Chen Shui-bian's bombshells have thrown Minister of Finance Ho Chih-chin for a loop. Will Minister Ho maintain his professionalism, and inform his superior in no uncertain terms that he cannot treat finance as a partisan benefit at the expense of the nation as a whole? If one's superior persists in irresponsible behavior, and if a minister of finance dares not speak the truth, is such a minister really worth having? The question is, will the Ministry of Finance stand its ground, or will it capitulate?

Lastly, as Chen Shui-bian trots out all sorts of tax cuts along with spending increases, we must remind those in charge to flip through the law books, and take a look at Article 91 of the Budget Law, and at Article 38-1 of the Financial Revenue and Expenditure Law. Merely flipping to these two laws and comparing them to Chen Shui-bian's orders the other day, what can we can say except: "Mr. President, you are in violation of the law!"

Original Chinese below:

中時電子報
中國時報 　2007.05.30
總統正帶頭違反預算法與財政收支劃分法
中時社論

過去一周，總統府不斷拋出財經新政策，而甫成軍的張俊雄內閣，則積極承接陳總統指示，忙著兌現支票。這些新政策包括︰一、土地增值稅自用住宅優惠稅率，畢生不限適用次數；二、希望像香港一樣，全免遺產贈與稅﹔三、繼續推動二次金改；四、都市周邊、科學園區、高鐵車站路邊農地，能改作住宅用地。這幾項政策，儘管手法翻新，但仍不脫「減少稅收，擴大支出，慷國庫慨，買選民心」的老路數，等於是拿新數字，填入舊公式，和一個多月前的提高敬老年金、提高老農年金，如出一轍，都是選舉考量。

過去，這類政策買票招數，基本上還是有某種固定模式。通常都是朝野立委先在立法院主動提案，或擴大支出，或減少稅收，以漫天要價的方式獅子大開口；然後財政部與行政院才慌忙回應，要一塊給五毛，就地還錢。這次情況卻不同，換由國家領導人主動開價，財政部事前毫無所悉，接到指示之後，只好倉皇回應，但還是不改討價還價模式。

陳水扁說，自用住宅優惠稅率不限適用次數，財政部說，可放寬為一生三次；陳水扁說，希望能像香港那樣，全免遺贈稅，財政部說，把遺贈稅免稅額調高到一千萬元，而且，生前就能使用。

租稅政策經緯萬端，莫說大刀闊斧刪砍稅源，就算是微幅調整，向來都要經過精密研議。這方面財政部本身的專業職能不在話下，然而，現在這批稅務專家，全成了事後諸葛亮，事前啥事不知，等到陳水扁突然扔出減稅、廢稅震撼彈，也只能倉卒提出因應方案。

記得我們曾數度剖析利害，說明遺贈稅宜減不宜廢、土增稅有助於抑制社會貧富差距擴大、各種年金不應每逢選舉就加碼。我們也一再強調，減免租稅收入及增加社福支出，不可能達到買票效果。因為，無論哪個政黨提案，對手政黨立刻能加碼跟進，結果雙方形成「零和」拉鋸，平白損及財政安定。上述陳水扁所提遺贈稅、土增稅減免案，將來仍須經由立法院修法實施。可以想見，倘若行政院真的將全案轉送立法院，那麼，立法院的藍營立委必然會加碼喊價，民進黨未必能得利。

站在民間立場看，最近所拋出的一系列財經政策，全屬「利富害貧」性質，便宜了富豪鉅室，受薪階級市井小民根本占不到多少便宜。小老百姓家產有限，適用現行遺贈稅法，本來就不必繳稅。廢了遺贈稅，或者降低遺贈稅，受惠的畢竟還是富人。同樣，現在房價高漲，一般社會大眾有屋可住已屬萬幸，就算換屋，也不可能頻頻為之，因此，放寬自用住宅優惠稅率適用標準，真正獲利的，也還是富人。

在此同時，領薪水苦哈哈過日子的基層社會大眾，辛辛苦苦好不容易賺得的每一分錢，都要繳納所得稅。明天，就是九十五年度綜合所得稅結算申報截止日，全國幾百萬基層納稅人眼看著政府無能、貪官橫行、治安敗壞、收入滑落，卻還是乖乖把血汗錢交給國稅局。

在此同時，當局卻一再踐踏基層民眾，不但減稅政策獨厚富人，更過分的是，政府還打算動用全體納稅人的辛苦錢，去填補基本工資不當調漲所產生的缺口。勞委會已經決定，對聘僱部分工時勞工的企業進行補貼，針對工作滿三個月、時薪不足九十五元者，補貼業者每人每小時十元，最久長達一年。決策粗糙歸粗糙，倒楣的還是社會基層民眾。

面對這股政策買票歪風，財政部的主事者敢不敢堅持專業立場，拒當傀儡呢？陳水扁幾記震撼彈，敲得何志欽部長暈頭轉向之際，何部長又會不會秉持專業理念，明白告訴他的長官，不能以財政為壑，禍害國家根基。畢竟長官堅持胡搞，這樣窩囊的財政部長，不幹也罷！問題是，財政部是會堅持，還是會配合呢？

最後，在陳水扁不斷扔出各種減少財源收入、增加預算支出之際，我們還是要提醒主事者先翻翻六法全書，看看預算法第九十一條、財政收支劃分法第三十八條之一。只要翻出這兩條法律，再對照陳水扁日前幾項指示，我們不得不說﹕總統先生，你違法了！