Taiwan

Tax Deadline Approaches: Uncompetitive tax regimes make my blood boil as they extract more than a pound of flesh!

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Yes, even in Taiwan we all have to pay Taxes, and even here Death is certain, too! Just to dispel any rumours. However, tax deadline is much later than either the UK or the US. And that day is tomorrow, May 31st! F32in2

So, after spending hours fighting with the paperwork (actually just two or three!) and plugging the data into our ‘free’ (did I say, free!) software, provided by the Republic of China National Tax Administration (Thanks, guys! Good job!)! No Quicken or Intuit here! … we were able to complete this year’s tax paperwork.

We printed it off, and promptly forgot to go to the Post Office! So that’s what I’ll be doing first thing tomorrow! I don’t usually mention taxes on this blog for several reasons: the most important of which is that taxes are SO different from country to country – and so much lighter a part of the burden for individuals in some jurisdictions than others.

Suffice it to say, Western countries, like the UK or Germany have tax rates that are CRUSHINGLY high for most people: income taxes, house taxes, car taxes (gas, licensing, etc.), VAT (17.5% in the UK), taxes for this, taxes for that, taxes for the next, … When other countries (like Hong Kong, and Japan…) adopt UNCOMPETITIVE tax regimes (EU Tax commissioners words, not mine), I just want to shout, “Yes! That’s right!” But it’s not these NIC countries that are being UNCOMPETITIVE, it’s YOU, it’s YOU OLD EUROPEAN countries that want high taxes, to line your treasuries’ pockets, not your citizens’ pockets. Yes, you might create social benefits with the monies, but then yet again, you might spend it on creating and maintaining beaurocracies! Why not let your citizens decide what to do with THEIR money!?

Now, I know and freely admit that I’m not an expert on taxation issues; nor do I care about European taxes that much! But when tax authorities that operate under profligate governments who want to create little fiefdoms at the expense of individuals cry that other countries with low-tax regimes are UNCOMPETITIVE, it is a signal that things are not right.

Let’s put this on an individual level: Two neighbors live in an average priced housing area with similar incomes and similar general expenses. One of the neighbors, however, spends more on gardening, house renovation, has more children, goes on more expensive holidays, purchases more food; while the other seeks to rein in non-essential spending, preferring simpler decorations, … Do you think it makes sense the first neighbor goes around shouting: “Neighbor, you’re being uncompetitive! You need to spend more! Spend more like me! Then we can be good neighbors!”

Do you think you’re government is profligate or thrifty? Is your government a good neighbor or a bad neighbor? Does your government encourage fiscal responsibility or fiscal stupidity? Comments, please! Perhaps someone more knowledgeable than I can weigh in on what tax competition means, too!

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This posting is an entirely personal and unresearched opinion on TAX issues. I do not pretend to KNOW anything about taxes or principles of taxation, except as much as I need to to file my own taxes. As with any financial issues, you need to seek validated and professional advice from qualified and authorized sources!
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What Would You Do If You Lost Your Job?

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Bargaineering recently asked: What Would You Do If You Lost Your Job? from Blueprint for Financial Prosperity

Indeed ’tis a knotty problem for most people. But for me, it’s not so difficult. You see, I have my own business, so if I lost my own job, then I’d have to fire myself. At one point, though, I was considering not hiring myself: I was costing too much for the company.

To explain, our business is a small language school in Taipei. We’ve been around for about 7 years in several guises, but since September 2006 we have experienced a sudden slowdown in our business, due to larger numbers of students exiting the program at the older age levels. Naturally, this wasn’t unexpected, but there was weakness in several other segments that didn’t make up for the exit of so many students.

Result: an unhappy proposition as our expenses remained static, but our income dropped by about 10~15% y-on-y (enough to wipe out our profit margin!). Since then, we’ve acted to minimize our cost structure as much as possible by cutting out everything that wasn’t ESSENTIAL to the operation of the business. Out went food subsidies which was cut to 0%, then we cut out non-essential refunds, and so on; but, eventually, though we had to re-organize our staffing structure. Three staff members were either terminated, asked to reconsider their job with us, or reassigned duties. In fact, we had expected two of them to take their job more seriously or take on a new set of duties than they had, but they chose to quit instead.

At one point, though, I was considering firing myself, because my contribution to the business couldn’t be financially rewarded. I thought this would be a good way to offset the expenses, but I was persuaded out of it, as I was a revenue generator for the school.

Throughout the whole period, it was quite unsettling, but I’m glad that we went through it. I don’t know longer term if our business will survive, but we have learner or relearned the importance of financial goals, as well as professional and business goals. Before that, we weren’t as focused on managing our financial assets as we were on the teaching side of things. Now looking back, all of the partners are aware of how much money we frittered away on non-essentials. Kinds of makes us a little queasy.

But then valuable lessons never come cheap.

How my life insurance came in handy: AmericaDirect.com

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When I first met my wife in Taipei, she was a life insurance saleswoman for Aetna Life Insurance. She naturally tried to sell me some life insurance and got me what she thought was a low term life insurance rate for my policy, as she was just learning the trade. The other possible reason for trying to sell me on this is that she just wanted my telephone number!

Of course, I was the somewhat reluctant customer… there’s nothing wrong with me… I’m going to live for ever 29-year-old! To persuade me to buy it, she signed me up and paid the first contribution for me! That was not a little money, but it gave her peace of mind!

Funny thing is: about two years later, after a very hectic and stressful period of my life, my body was physically run down! I got pneumonia, ended up in hospital for 10 days, with a raging fever; and needed fairly powerful medications. This was all in the days before Taiwan’s National Health Insurance. When we went to check out, we paid the bill for that hospitalization, and it wasn’t cheap, something like half a month’s salary, plus I didn’t make any money for about two weeks or thereabouts.

After contacting our then insurance agent (wife was now an English teacher!), we were covered in full almost for the illness. When the check came, it was a might relief! That was handy. Handy, indeed. Next time, I took better care of myself, too!

Nowadays, though, I don’t have to meet someone on a bus just to get good life insurance coverage, I can just find online term life insurance rates and get instant insurance life quotes at the click of a button. However you decide to get life insurance, having appropriate life insurance can really make a big difference when things go bad.

Sponsored Post by AmericaDirect.com.