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September 19, 2017

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Liu follows in mother's footsteps with 'stock gains tax jinx'

Finance Minister Christina Liu's (劉憶如) resignation yesterday has been dubbed by the public and media as part of a "stock gains tax jinx," as her mother, who served in the finance minister position over 20 years ago, also stepped down due to the exact same reason: troubles implementing a stock gains tax.

Designated by former President Lee Teng-hui (李登輝), Liu's mother Shirley Kuo (郭婉容) took on the position of finance minister in 1988. She was the first female minister in Taiwan's history. With disregard for public opinion in September 1988, Liu announced that beginning in January 1989, a stock gains tax would be implemented.

Within the next month, the TAIEX dropped from the 8,900-point mark to a low of 5,700. After a year of failing to deliver any significant tax revenue, Kuo stepped down to take responsibility for the failed policy, and the tax was repealed. It was then that stock transaction tax policies, which are currently still in use, were proposed and implemented.

Twenty-four years later, in early 2012, Liu was appointed by President Ma Ying-jeou to lead the Ministry of Finance (MOF) toward its goal of delivering social justice. That Liu followed her mother's steps into the finance minister position became a legendary record in Taiwan politics.

It was at the end of March that discussions about re-implementing the stock gains tax were first heard, and after the MOF announced in April that an official draft will be issued by the Executive Yuan within a month, the TAIEX began dropping, with over 1,000 points vanishing within a month.

Beginning in May, rumors of Liu being tired with the job began to circulate, and within days of the stock gains tax drafts being sent to the Legislature, Liu announced her decision to resign, yesterday.

With her resignation yesterday, Liu had served as finance minister for about four months — 14 months less than her mother. Political commentators have described Kuo and Liu, the once legendary mother-daughter finance ministers, as having both become sacrificial lambs of the "stock gains tax jinx."

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