Saturday, April 23, 2011

Comments YuanLu ChenJianLi intern reporter

Now in China has been and per capita GDP (us $495) tax-free flat cases, raising the cutoff point for most low-income no effect, easy to expand the income gap, also do not comply with tax development and the direction of the reform of income distribution.
On April 20th, personal income tax law amendment submit the draft 11th NPC standing committee hearings, the meeting will be proposed to the draft tax-free personal income minus income shall be exempted from the forehead, criteria, which by now monthly 2000 yuan rise to 3,000 yuan a month. Although this amount, but still expected after the media and public triggered the warm response. Up to 3,000 yuan, can adjust exactly refunding distribution of income? And can truly help to reduce the tax burden of low-income people?Tory Burch Flats Sale, Tax reform, in addition to improving the cutoff point, what still viable path?
Therefore, our correspondent interview with the economist, yanjing overseas Chinese university President professor Watson.
The cutoff point hike will expand the income gap
The southern metropolis daily: as expected, the authors of the NPC standing committee, personal income tax threshold will be proposed to the amendment, raised to 3000 yuan, the media and the public view, is this the cutoff point also should be improved. Some scholars have suggested that is 5000 yuan, and Suggestions, 1 million 8,000 yuan, also have Suggestions and C PI hook, seems to be the cutoff point, the higher the better, why can form a kind of such views?
Watson: one is the revenue is growing quickly background, everybody wants to tax cuts. 2 it is hitchhiking psychology, it is a government directly from my pockets less with a dollar, is a dollar. Other how impressing me no matter what. Third, this thing so much attention, caused by high earners with China on the right. Media practitioners, two high earners, and some representative, right, they formed such a seemingly consensus view. Inside this issue is what is the purpose of tax cuts? What kind of tax reduction, how a subtraction, can effectively to achieve purpose?
Southern metropolis daily: an almost general view is that the cutoff point rise, can adjust the income distribution, enquiring for low-income people?
Watson: this affirmation incorrect, also counterfactual. The data from the ministry of finance disclosure can be seen, the Chinese working earners, not only 28 percent of farmers, originally pay tax, that is, the tone (us $495) tax-free, 72 percent of people don't benefit. Low-income, how could not benefit for low-income said burden? The scheme from view, the published for middle-income earners is tax cuts, has nothing to do with low-income, narrowing the income gap no positive role.
For now the taxable salary is in 2000 yuan monthly salary namely below 2600 yuan, 27 yuan low-income people, who would not pay tax, tax on their threshold adjustment is a completely ineffective tool. Our country has 480 million in the second and third industry employment, including the worker is only accounts for about 2 million migrant workers, plus town low wages, employment population is 3,000 yuan monthly salary of insufficient 3000 yuan taxable account for 72%, this also worker, said he, to our country (us $495) tax-free adjustment in the second and third industry more than 70% of the population and truly low-income employment without effect, also in agriculture in employment with the independent nearly 3 million population. We can't overstate adjustment to improve the distribution of income threshold function.
No doubt, the other half of our country town taxable salary is in 2000 yuan of above, improve the people (us $495) tax-free is sure to increase their real income. But the cutoff point upward different amplitude of different income levels, the person also is quite different. Such as tone and 3,000 yuan (us $495) tax-free, the original 3000 yuan taxable pays people save tax 75 yuan, 5000 yuan RMB 150, save 2 million people provinces 200 yuan, the cutoff point is raised to 5000 yuan, the people are still workingTory burch outlet to 3,000 yuan, 5,000 yuan provinces $75 to $325 working province, 2 million working can be mentioned provinces 1625 yuan, 8,000 yuan, the original 3000 yuan wage people still save $75, 5000 yuan taxable wage people also still provinces 325 yuan, and so on. Since then can see a rule, is the higher threshold of tone, lower income people began to lose its significance. The higher the high income, only the people benefit, this and income distribution reform proposes, expanding, suppression of low in the direction of the high opposite. The cutoff point raised must regularly, is not the better.
Southern metropolis daily: here is a data is very interesting, Treasury deputy secretary reported a, 70% of people think 3000 yuan cutoff point is too low.
Watson: it is presented here right distribution imbalance. All the media all take it as a title, but this sentence is clearly a lie, why? The same is vice minister speaking, the cutoff point mentioned 3000, taxpayer reduced 48 million, with thirty-six million to pay tax. Taxable working person mentioned 3000 namely money wages can amount to 3,700 yuan, only 12 per cent of people after tax, 88% of people don't pay tax, did not affect to them, don't pay tax will support the cutoff point to improve? Where the people Christian Louboutin Boots Sale, think that 70% of 3000 yuan cutoff point low? If you ask the 10% of taxpayers, may be 100% they would say too low, because it will improve the cutoff point, will improve their real income.
If improve to 5,000 only 3% threshold, tax, the tax became "aristocrat tax", almost equal took tax in China is cancelled. It has to do with the development of history of an opposite. Personal income tax is early utopian socialist brought out, by using progressive system to adjust income inequality, and in western society that was radical left-wing slogans, and now has become widely accepted reality of western society. This tax is also widely used a world means of adjusting income distribution in China, almost lose their due role.
Therefore, in China now has and per capita GDP (us $495) tax-free flat cases, raising the cutoff point for most low-income no effect, easy to expand the income gap, also do not comply with tax development and the direction of the reform of income distribution.

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