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Updated Tuesday, July 14, 2009 9:22 am TWN, The China Post news staff

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The growing gap between the rich and poor

For a long time, Taiwan took pride in the fact that it was a society where wealth was somewhat equally distributed. Well, the gap in income between the richest 10 percent of the people and the poorest 10 percent had been small in those years before Lee Teng-hui was popularly elected president in 1996.

The gap has since widened. And drastically in the past few years. The richest five percent of households earned an average annual income of NT$4.28 million in 2007, sixty-two times that of the lowest five percent. The difference was a mere 32 times in 1998. Even in 2001, when Taiwan's economy shrank by 2.1 percent, the rich-poor gap stood at 42 times.

As a matter of fact, the number of low-income households shot up to a record high 93,000 in the fourth quarter of 2008, owing mainly to large-scale layoffs and furloughs for employees on leave without pay. Altogether 145,000 people lost their jobs in Sept. 2008. The number soared to 291,000 in January. A total of 14,200 firms closed in August and September last year, more than double the figure recorded in the corresponding two months in 2007.

Meanwhile, the government is cutting tax on estate and earnings from abroad of the rich, helping them to further increase their income and widening the already wide gap between them and the have-nots.

Most of the victims of this lopsided income distribution are lower middle-class workers, who form the stabilizing force of society. They are falling below the poverty line. They need social relief. Above all, they lose pride as earning members of society. Social unrest may result.

All administrations in Taiwan have been very friendly to big businesses. Tax exemptions were given to new enterprises, such as IT manufacturers. Assistance was given where necessary. Subsidization often helped businesses to turn into conglomerates. The interests of labor, on the other hand, were, more often than not, ignored.

The trend has to be reversed, now. We do not urge the government to milk the rich to feed the poor, but it has to begin to tax the fat cats more heavily to help stop the rich-poor gap from getting out of control.

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