The gap between the household incomes of the richest and poorest sectors of Taiwan’s population narrowed slightly in 2010, Vice Premier Sean Chen said Aug. 18.
“The disposable income of the wealthiest 20 percent of households was 6.19 times that of the poorest 20 percent, an improvement from 6.34 in 2009,” Chen said at a news conference, citing data from the Directorate-General of Budget, Accounting, and Statistics.
DGBAS data showed that average disposable income in the top bracket amounted to NT$1.78 million (US$61,380), compared to NT$289,000 in the lowest.
Pointing out that the country’s gross domestic product grew 10.88 percent in 2010, Chen said, “it is noteworthy that income equality was maintained, as economic progress typically results in a wider wealth gap in both developed and developing countries worldwide.”
An aging population and reduction in family size are factors that threaten Taiwanese household income, he noted.
“The average number of members per family decreased from 3.62 in 1980 to 1.82 in 2010, when 46.7 percent of households in the bottom economic group were headed by people over age 65.”
Chen said that without cash subsidies to the underprivileged provided by the government, the income of the top group would have been 7.61 times that of the lowest group. “If noncash subsidies are also counted, the wealth gap is even smaller, at 5.67,” he added.
Tax reforms implemented by the Ministry of Finance also contributed to the reduced wealth gap, MOF Minister Lee Sush-der said.
“This year the MOF launched personal income tax cuts while imposing a special sales tax on luxury goods and levying taxes on individual overseas income,” Lee said.
The minister noted that as Taiwan adopts progressive taxation, the system itself helps improve income equality.
Chen said the Cabinet has ordered a task force to map out detailed measures to narrow the income gap.
“Taking care of those with few resources and creating more jobs for them are long-range government objectives,” he said, adding that the unemployment rate has dropped below 5 percent since last October.
DGBAS statistics also showed Taiwan’s gross domestic product per capita will reach US$20,629, with projected economic growth at 4.81 percent. Meanwhile, the consumer price index is expected to increase 1.59 percent by year-end. (THN)
Write to Aaron Hsu at pj1210meister@mail.gio.gov.tw