The big issues facing Taiwan today

Politics Taiwan Politics
21

I’m inclined to agree with HH on the Taiwanese legislature. I wonder if an administration, however might be able to facilitate similar goals through bank regulatory means. For example, to discourage further construction financing, Taiwanese regulators might increase the amount of capital that a bank has to hold in reserve for each dollar of residential construction loans. In addition, the regulator could also establish concentration thresholds such that banks couldn’t have more than a certain percentage of their loans or capital in residential construction loans. These measures wouldn’t flat out prohibit residential construction lending but it could make it more difficult and expensive to obtain.

Of course, limiting the amount of construction financing might ultimately serve to limit the amount of new housing stock coming on to the market. And any time you limit new production of a resource, you make the existing resrource stock more valuable and expensive. This would have the impact of making housing more expensive, I think. That being said, I don’t what the “right” answer is in terms of inventing people to extract housing equity and invest it in more productive outcomes.

As a homeowner in the U.S., while I know the circumstances are different, I don’t know what kind of lure I would need to cash out some of my equity and invest it in a business or spend a lot of it on remodeling (which would improve business for contractors and suppliers). I was lucky enough to buy a home in a down cycle so I’ve built up a lot equity and have a comparatively cheap mortgage payment. No real incentive for me to tinker with that.

22

This all years late and squidulkioms of dollars short. vast areas
Of land are already developed and there are more than enough housing to go around given the population. So you’ve got urban sprawl an ugly housing but at least the rent is cheap and will
Always be cheap unless the legislators and big business find a way to game that market. House
Prices have already peaked but I guess there’s so much money socked away In Taiwan they won’t crash and cause a credit/financial crisis. All this stuff about land control Etc, it won’t happen Taiwan has largely been controlled by a bunch of rich families for centuries! Now
These families control giant insurance and banking groups which ‘lobby’ the government.
Anyway what’s the point of trying to do this now when Taiwan is already a nation of property and land holders, those people want to have high asset prices in the main, especially the older folks but also the young who hope
To inherit the assets. There’s not really a concept of fairness here as I wrote earlier, there’s more a collection of disparate interest groups.

23

If it is true that the legislators can be bribed to make crappy laws, then by the same token it is also true that you can bribe them into making good laws. This is why political power in the highest level of echelon is extremely important.

What we’ve had in the past 8 years is a political ideology, a school of thought that assumes that Taiwan’s affluence and freedom is an impediment to China’ glorious unification of ten thousand years. This school of thought believes that young Taiwanese should be sent to China to be re-settled, and in their place the good Chinese should settle in Taiwan to help secure KMT and ROC bureaucratic class to suppress Taiwan independence.

24

More issues:

  • The aging population structure. This is causing schools to close, and setting various pension funds on the road to bankruptcy (unless retirement ages and/or benefits are adjusted, as they surely will be). The national health insurance system is on shaky ground as well. Paying women to have more babies won’t work, but immigration can be arranged fairly easily. Unfortunately, the bulk of it will probably come from China.

  • Food safety issues.

  • The prevalence of criminal gangs, who are apparently well represented in the legislature. Problems with the police and judicial systems, and the rule of law in general.

  • Various issues relating to property laws, such as government appropriation (forced purchase) of land for commercial re-development.

  • The poor quality of the education system.

25

Ironically this was the basis of Sun Yat-Sen’s original tax policy for the Republic of China; all taxation would be taxation of land ownership.[/quote]
Under the current system, taxing land ownership would hurt the wrong people, i.e. families who 40 year ago purchased a concrete slab gongyu in downtown Taipei. At time of construction that was considered middle class. Yet due to the current speculation and bubble, that gongyu is worth 30+ million NTD.
It has nothing to do with Sun Yat-Sen and I personally don’t care about ROC. What the DPP will implement is a Property Gain Tax and Property Tax based On Fair Market Valuation…
But wait, I’m not even talking about taxation.
I’m talking about better lending and borrowing by financial institutions… You park, I extract.[/quote]

Your position is inconsistent. If you wish to extract the wealth parked in real estate and put it toward other things, wouldn’t the families who 40 years ago purchased land and have done nothing with it since be precisely the people you would want to encourage to sell? What makes them a special class worthy of protection?

Sun Yat-Sen wanted to make sure land was developed, and that the rich, whom he perceived as being land-owners, would disproportionately pay for government services, and that non-land-owners/workers would not be taxed. SYS’s idea is certainly more fair than yours. How is your idea better than SYS’s from 100 years ago?

26

Ironically this was the basis of Sun Yat-Sen’s original tax policy for the Republic of China; all taxation would be taxation of land ownership.[/quote]
Under the current system, taxing land ownership would hurt the wrong people, i.e. families who 40 year ago purchased a concrete slab gongyu in downtown Taipei. At time of construction that was considered middle class. Yet due to the current speculation and bubble, that gongyu is worth 30+ million NTD.
It has nothing to do with Sun Yat-Sen and I personally don’t care about ROC. What the DPP will implement is a Property Gain Tax and Property Tax based On Fair Market Valuation…
But wait, I’m not even talking about taxation.
I’m talking about better lending and borrowing by financial institutions… You park, I extract.[/quote]

Your position is inconsistent. If you wish to extract the wealth parked in real estate and put it toward other things, wouldn’t the families who 40 years ago purchased land and have done nothing with it since be precisely the people you would want to encourage to sell? What makes them a special class worthy of protection?

Sun Yat-Sen wanted to make sure land was developed, and that bourgeoisie land-owners would disproportionately pay for government services, and that non-land-owners/workers would not be taxed. SYS’s idea is certainly more fair than yours and would encourage rapid development. How is your idea better than SYS’s from 100 years ago?[/quote]

27

Ironically this was the basis of Sun Yat-Sen’s original tax policy for the Republic of China; all taxation would be taxation of land ownership.[/quote]
It has nothing to do with Sun Yat-Sen and I personally don’t care about ROC. What the DPP will implement is a Property Gain Tax and Property Tax based On Fair Market Valuation…
But wait, I’m not even talking about taxation.
I’m talking about better lending and borrowing by financial institutions… You park, I extract.[/quote]

Your position is inconsistent. If you wish to extract the wealth parked in real estate and put it toward other things, wouldn’t the families who 40 years ago purchased land and have done nothing with it since be precisely the people you would want to encourage to sell? What makes them a special class worthy of protection?[/quote]

No. Those are precisely the people I wouldn’t want to cajole into selling their property. They have been responsible for the good upkeep of their property either by making it useful for themselves, for example as their primary residence, or by renting it out to tenants. Either way they are already a part of their community. And precisely because of that, these property owners do not deserved to be bulldozed Chinese-styled or robbed indirectly by a policy that encourages them to sell. If they sell their property it’s entirely their choice and their gain. But Capital Gain tax will be collected under my plan.

[quote=“darienpeak”]
Sun Yat-Sen wanted to make sure land was developed, and that the rich, whom he perceived as being land-owners, would disproportionately pay for government services, and that non-land-owners/workers would not be taxed. SYS’s idea is certainly more fair than yours. How is your idea better than SYS’s from 100 years ago?[/quote]

Sun Yat-sen is not applicable to Taiwan because the context of his theory (you call it a plan) was 100 years ago in medieval China. That traditional Peasant-Landlord Struggle on farmland in a non-industrialized medieval period is not applicable to what we’re talking about in Taiwan today, or any modern, industrialized, capitalistic economy.

28

[quote=“hsinhai78” ]
Under the current system, taxing land ownership would hurt the wrong people, i.e. families who 40 year ago purchased a concrete slab gongyu in downtown Taipei. At time of construction that was considered middle class. Yet due to the current speculation and bubble, that gongyu is worth 30+ million NTD. [/quote]
You’re right that taxing land ownership (i.e., annual property tax) "as is"would hurt the people especially seniors who own that 40-year-old apartment as their primary residence. Therefore a better law is to tax senior differently and/or tax primary residence differently. I’m sure policies like this that take into account housing bubbles must exist in other advanced countries as well.

Still, property tax should be the main source of municipals’ income, to maintain adequate funding for school, community, and basic infrastructures like parks, road work, permits and licenses.

One of China’s many problems is that local governments get their main source of revenue by bulldozing old communities and creating ghost cities for property market speculation. This is not taxing, because by definition taxing would have fairness built-in.

29

Apparently Taiwan’s government isn’t above a little PRC-style happy face economics:

[quote]Manufacturing sector on the upswing: CIER
The purchasing managers’ index (PMI) for the manufacturing sector rose to 54.9 points in May, its third consecutive month of expansion, the Chung-Hua Institution for Economic Research (CIER, 中經院) reported Wednesday.

The growth indicated that the economy was making a gradual recovery, CIER President Wu Chung-shu (吳中書) said.

The transportation equipment industry led the manufacturing sector in growth with a PMI of 61.4 last month, followed by the electrical and machinery equipment industry’s 57.4.

A reading above 50 indicates expansion while a figure below 50 represents contraction.

The nation’s service industry did not perform as favorably. The nonmanufacturing index slipped 0.9 points from April to 47.9 — the second straight month of contraction.

Firms were “cautiously optimistic” about how the economy may fare in the next six months, Wu said.

Uncertainty remained, he added, attributing it to slow activity in the finance industry, the changeover in the Presidential Office and concerns over future cross-strait relations.[/quote]

[quote]Taiwan manufacturing PMI down to 48.5 in May

The Nikkei Taiwan Manufacturing Purchasing Managers’ Index, or PMI, declined to 48.5 in May from 49.7 in April. The rate of deterioration was the fastest since October 2015.

A reading above 50 indicates economic expansion, while one below 50 points toward contraction.

Annabel Fiddes, economist at Markit, said “Taiwanese manufacturers reported a sharper deterioration in overall business conditions in May, with output and new orders both contracting at faster rates than in April.” She added: “Survey respondents indicated that customer demand declined across both domestic and international markets as the global economic outlook remains murky.”[/quote]

30

Just a guess, but I would bet that KMT legislators don’t really care about pork imports from the US or food from areas in Japan they claim are affected by radiation, but are more interested in isolating Taiwan from the above countries in order to make it more dependent on China.

31

There, fixed that for you.

Guy

32

There, fixed that for you.

Guy[/quote]
why cross out “more dependent on China?”
Do you know that import/export goes through distribution channels i.e., middle men?

Also buddies in food system include DingXin and WantChina, right?