Taiwan has run budget surpluses for several years, buoyed by a windfall of tax revenue. Boosted by a semiconductor boom and other factors, the government collected 1.87 trillion New Taiwan dollars (about 82 trillion won) more than its budget targets from 2021 to 2024. Adding still-unconfirmed revenue for 2025, the excess tax revenue over the five years through last year is estimated at around 100 trillion won.
With state coffers overflowing, Taiwanese President Lai Ching-te decided on the 18th to include in next year's budget a plan to pay every citizen an "artificial intelligence bonus." Citing a wish to share the benefits of the excess revenue driven by the AI boom, the plan would pay each person 10,000 New Taiwan dollars (about 440,000 won). Lai had previously opposed a similar proposal by the opposition last year, calling it "populism." Because of this double standard, critics in Taiwan say the policy amounts to vote-buying cash ahead of local elections in November. Others argue loudly that the money should be concentrated on vulnerable groups or on building public housing rather than handed out to every citizen.
In South Korea, Kim Yong-beom, head of the presidential Office of Policy, floated the idea of a citizens' dividend from excess tax revenue in the era of AI infrastructure in May. When criticism arose, the presidential office distanced itself, saying it was "not the government's official position, nor an internal discussion of the presidential office." The controversy then subsided after the Ministry of Planning and Budget created a Future Response Fund to set aside revenue growth that exceeds the long-term trend. But with news of Taiwan's push for a citizens' dividend from excess revenue, there is concern that some calls to redistribute large corporations' excess profits across society could gain traction.
The government and political circles should benchmark Taiwan's solid fiscal management rather than a Lai-style citizens' dividend from excess revenue. By strictly maintaining a balanced budget, Taiwan improved its national debt-to-GDP ratio from 34.0% in 2012 to 23.9% in 2024. Over the same period, South Korea's debt ratio worsened from 29.5% to 45.8%. It should be kept in mind that South Korea and Taiwan differ in the state of their national finances to begin with.
