Controversy over stock gains tax carries political subtext

Friday, May 11, 2012
The China Post news staff

The row over the Ma administration's plan to introduce a tax on stock gains has been a financial issue on the surface. But there has been a political subtext about President Ma Ying-jeou's leadership.

Ma has been stressing from the start that the stock gains tax is part of his agenda to restore fairness to the taxation system.

Debates and questions have been surrounding issues such as whether the government's design is sufficient or in the right direction to achieve what it aims for, or how much impact the tax would have on the stock market and the economy in general.

For Finance Minister Christina Liu, there is a personal touch to her reform — to finish what her mother Shirley Kuo was herself unable to complete. Kuo stepped down as finance minister almost two decades ago after a failed attempt at introducing a stock gains tax.

Now both Ma and Liu seem to be bent on finishing the task quickly, ignoring the reasons, the reality and the complexity behind the long delay.

But time and time again Ma has shown to the nation how single-minded he can be. He has been reluctant to make compromises on the things that he thinks are correct to do although he actually has had made a lot of compromises.

He must have dreamt of following in the footsteps of those legendary righteous officials and emperors of ancient China who were not afraid to stand up to the entire world, but that could only be a dream — or a nightmare — in the modern-day democratic reality.

It is no secret that Ma has not been seeing eye-to-eye with many KMT heavyweights, such as Legislative Speaker Wang Jin-pyng.

He hates factional control of regional politics, which he sees as the root of corruption. He has tried to get rid of it by nominating “clean” candidates with no connection with local factions in several elections, but the results have been mostly disastrous — the KMT's loss in the Lugang township chief race in Changhua County earlier this month being the latest example.

So Ma does not have too many friends on either the central or local level. And he may have alienated more over the stock gains tax.

It has been described as a “betrayal” to Ma after some KMT lawmakers, including Wu Yu-sheng — a loyalist to the president — blocked the government's stock gains tax bill from making the legislative agenda.

Both Ma and Wu have dismissed the claims of “betrayal,” but the lawmakers' move has underscored the political implications and highlighted the subtext.

Wu has explained that they are blocking the bill because it is not the right time to discuss it when the nation is already too carried away by the energy price hikes and the row over U.S. beef imports.

But that is unacceptable to Ma, who has asked the finance minister and some other party officials to step up communications with the KMT lawmakers.

Is there really a gap in communications between the two sides? Doesn't Ma know that the KMT lawmakers are no longer willing to rubber-stamp whatever the administration throws at them? Don't the KMT lawmakers understand how resolute the president is to force through his reforms.

The tension lies in the fact that in fact both sides know exactly what the other wants.

Ma is bent on leaving a legacy, having admitted that his hands have been tied over the past four years because of re-election concerns.

It is not easy for Cabinet officials to materialize Ma's reform agenda. And the president — who is protected by the constitution from having to answer to the parliament — is unlikely to hesitate to let Cabinet ministers take the blame for him.

Economic Minister Shih Yen-hsiang reportedly will be axed soon over the energy price row. And the nation has never stopped speculating whether the finance minister will repeat her mother's fate.

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