Abstract
This study analyzes the income and wealth distributions in Taiwan based on Individual Tax Returns for 2005. The contribution of this study is to document Taiwan’s income distribution, wealth distribution and the relationship between income and wealth. The results reveal that both wealth and income are highly concentrated in the top 1% of income households. For the top 1% of income households, wages and capital income were the two major sources of income, and stock investment was the major type of assets. However, for the top 0.1%, capital income becomes the single most important source of income. The research results also show that the distribution of wealth in Taiwan is U-shaped in 2005, in which the wealth share for the bottom 5% of income households, is larger than the 5% of middle income households. Households with the head aged 65 or more own more wealth than other age groups. Households with more wage income also tend to also have more capital income. On the other hand, households with more capital income do not necessarily have more wage income.|