Li Wei Guang: China and the tax cuts were related to previous
Spirit in Chinese history, the Governance News: June just past, agencies, experts have predicted June CPI trend that will fall to between 7.1 to 7.5 percent, but they also are likely to have predicted a rebound in the second half. In the face of inflation, Europe and America usually through tax rebates or direct tax policy (such as the U.S. tax rebate this year to $ 1,200 per family), to ease the pressure on people's lives, the Chinese Government to implement a similar policy?
Li Wei light: not only can and should. this year China's economic growth has slowed the trend appeared, if the policy adjustment is not good, a sharp decline in the possibility exists. In fact, last June after the decline in GDP, there are signs, but there are no special attention to it. It performance, that is, the rate of industrial production and investment declined. Since the first quarter of this year, this trend more obvious point. Also in the trade, exports to the U.S. this year was actually the first two months of zero growth, this also shows that the economic downturn has continued with some sex.
investment and exports has been China's economic growth this year, the two demand factors, and now these two are on the decline, there is clearly a crisis in our economy, those . only tax cuts or rebates, only to bring new businesses and the vitality of the family, encouraging domestic demand. Should the tax reduction or refund of tax that there is a relationship between economic growth and awareness of the problem.
Southern Metropolis Daily : What understanding of the problem?
Lee Wai-kwong: For decades, the supply of schools of thought on the impact of the world economy has been strong ever. supply-side against the market economy. In their view, the supply will automatically create demand, so increasing supply is more important than creating demand. for the government, in reality, there is always able to bring the same benefits (tax) rates of two completely different: When the tax rate below a certain level, will stimulate the enthusiasm of economic activity, social supply is increased, the government increase tax revenue in the same direction; when rates higher than a certain level, will lead to contraction of economic activity, social supply Therefore, the amount of decline, the result is a steady decline in government revenue will be.
supply-siders claim that the Government more tax revenue is not the best way to raise taxes, on the contrary, but the tax cuts. tax, social economy will be prosperous; tax, social supply will increase; tax cuts, government revenue will not only not declined, but will improve.
the United States since the Reagan era, the eighties to actively pursue the supply-side ideas. later appeared a world-wide tax campaign, after dozens of countries, including the original part of the Soviet Union and Eastern Europe and some countries have introduced tax cuts and programs, and even famous for high taxes reduce the income tax in France also announced and the standard rate of VAT. President Bush just took office less than 20 days to propose to Congress a huge tax cut 1.6 trillion tax cut plan mm10 years, although Congress later reduced to 1.35 trillion, but the amount of tax cuts is still amazing. This is the United States, Ronald Reagan 80 years later, President Clinton's two massive tax cuts to continue.
in Chinese history, the also confirms this truth. such as the Tang Dynasty, before the said that China previous whether the strength of tax cuts?
Li Wei light: is entirely the conditions and strength, this is not has been showing explosive growth. has grown from 1 trillion increase in 1999 to 5 trillion in 2007, but that was not all extra-budgetary, institutional income. According to scholars Zhou Tianyong calculations, China's fiscal revenue last year, 51,300 billion. but in fact China last year about 4.8 trillion of tax revenue, revenue from land sales 1.2 trillion, 1.6 trillion penalty fee, plus the lottery income, social security funds and tobacco tax, a total of about 9 trillion . In other words, about 3.9 trillion yuan last year, revenue did not enter the government submitted to the National People's Congress budgeted.
compared with the previous year, last year more than 31% revenue growth, and with this corresponds to the China's GDP growth last year, less than 10% points, per capita disposable income of urban residents increased by 12.2%, while the disposable income of rural residents increased by 9.5%, much higher than the increase in fiscal revenue and GDP per capita disposable income growth.
In the first four months, revenue has declined year on year in April an increase of 17% per month increase in recent years in more than 20%. I thought revenue trend will be a little inhibited, may seem the problem is not that simple. May rose as high as 52.6%, it is slow, revenue decline should also be synchronized and can not come backwards. from a few months, this year's revenue is still rapidly increasing, this should be a developed countries, China's macro tax burden exceeded
Southern Metropolis Daily: Despite the central government revenue in recent years has been This said, the media and civil society scholars have been widely contested, was that people do not respect the intelligence and feelings.
Lee Wai-kwong: There are basically three kinds of macro tax burden statistical standards. tax revenue in GDP, is a tax burden; fiscal revenue in GDP, is China's macro tax burden is about 20%, and certainly not very high. But China's financial system, determine that this statistic is questionable. Government's fiscal revenue, net of tax, there is an almost keep pace with its revenue Group: budget, fees, extra income, institutional income. these were all added up with the GDP compared to the real fees, fines, and levies, as well as business costs have included bribery of officials, it is not clear how much say. All this, officials have been intentionally or unintentionally ignored.
if the budget income, income statistics go outside the system, China's macro tax burden has reached about 35%, even higher than in developed countries 5 percent In 2002, the then State Administration of Taxation, the author pointed out that Mr. Jin Renqing , the ratio of government revenue: central budget tax revenue-GDP ratio of 15%, at all levels of government departments and regulatory fees and charges accounted for 10% of GDP ratio, a variety of systems is the ratio of fees and charges accounted for 10% of GDP, China's macro tax burden of large diameter 35% level (Jin even higher, more than 36%, which is close to the planned economy era of reform and opening up a level.
Southern Metropolis Daily: For the fiscal revenue, the central government in recent years, logic seems to be better, more total , the faster growth of the central government greater ability to regulate the economy, the stronger the ability to transfer payments, social security and can be used in the more money on welfare, many people seem to have accepted this logic.
Lee Wai-kwong : This is the Chinese system and culture. China since ancient times has been a centralized system, in culture, the Chinese have had to have a backbone, a strong central government as a psychological dependence, and pay attention to the modern market economy separation of powers, called for the establishment of civil society, but also to civil society activity. this was all Chinese culture, traditions lack.
China is to establish a market economy, which only requires the market order, it also requires a vibrant civil society. From The beginning of the snowstorm and earthquake can see that, the non-self, the ability to save a total of rather weak. in the event of major natural disasters, we just wait out the policies the central government to take measures to rescue, while local and people's own self, a total saving of the resources are scarce. This is a resource too concentrated, the local lack of autonomy, lack of energy, powers and financial authority does not match the performance.
surgery now on the fiscal and taxation system of the southern city
News: Indeed, although the Chinese economy under the guidance of the rapid development of the Government, but in this process, we also see a virtual monopoly of all resources, all-powerful central government, which also is closely related to China's current taxation system.
Li Wei light: in 1994 the implementation of the tax system, results should be affirmed, but there are problems, its biggest drawbacks is the financial power concentrated in the central, to ensure political totalitarian system, and a lot of powers are left in place. the tax system does not change the central and local powers division pattern, the local government to use 45% of fiscal revenue relative to revenue, about 75% support for the relative expenditure responsibilities. and the tax system before the reform, local government is close to 80% of revenue supporting less than 60% of financial expenditure responsibilities. tax distribution, the local financial shortage, but to their own devices, which appeared in recent years, Government of such a situation can only open eyes closed eyes, as most revenues are to make it take it out.
financial consequences of land caused by financial order disorder, that the central government now has to implement property tax difficult. do not want to levy such local taxes, as it may lead to local house prices fall, reducing its revenue. to the end of the six provinces of Central has worked with idling real property tax issues, without a successful outcome, this is the performance issues.
the central government to rope in his hand a lot of financial resources, the base is too large, with up to become a problem, so a hand in hand is the the.
the central government of collecting about 30% of the funds will be returned to the place through transfer payments, but the last bit of the process, is difficult to ensure fair and equitable tax distribution process. the local circumstances vary, the central government can not to completely and accurately grasp the detailed local information, transfer payments will be difficult to achieve good results, but also provide space for corruption, which shows over-centralized system is not necessarily a good system.
should said that now operate on fiscal and taxation system of the time, Premier Wen also said in March the next five years he would finance reform in an important position. but unfortunately, at least so far, have not seen the government substantive reform of the financial system signs.
Southern Metropolis Daily: one is the high tax burden, the Government's fiscal revenue soared, the other is the welfare of the people to enjoy lower structure of central government expenditure in recent years, controversy also relatively large.
Lee Wai-kwong: If the high taxes, while the implementation of high welfare, of course, is that Western countries do, but in China is not. According to scholars in 2003, China's official party and government spending, if the increase All expenditure on the fiscal budget, which accounts for 37% of government revenue in 2007, conservatively estimated at about 30%. the Western developed countries, the highest administrative official expenditures, but 15% of the United States has the lowest number in Japan, only 2% a little bit.
soaring revenues at the same time, a super, unlimited government also established. taxed more, the more expansive government, government expansion, they need more resources to support more large-scale tax economic vitality of the private sector will be squeezed even more, this is a vicious cycle. this cycle has been haunted history of China since ancient times, have not yet found a power to restrain the endless expansion of government.
the same time, the Chinese government revenue used in the improvement of the national benefits are also far from enough. This year two sessions, the delegates to the 2008 vote against the annual budget of more than 300, 100 abstentions sheets, combined ratio is not a low figure . This situation has never occurred before. This shows that some voices in recent years the Government's budget policy is satisfied. Of course it should be noted that in recent years the central government spent on education, health care, the proportion of social security increased year by year, working to build income, fees and charges have not included, nor submitted to the National People's Congress considered how to use can not tell. This situation can not continue to.
Southern Metropolis Daily: Yes, this monitoring role of the NPC should be further sclerosis. We know that although the central government's budget submitted to the NPC examined and approved each year, but only take one form. actually submitted to the NPC before they are considered the implementation of the Government's budget has a quarter of a.
Lee Wai-kwong: modern tax system design concept, which the tax levy, tax level is high, these are by the legislature to authorize the Government. Unfortunately, the Constitution does not explicitly People's Congress the exclusive right of the tax legislation. Since the Constitution omission of the right to tax to the government Investment Enterprises and Foreign Enterprises Income Tax Law lower levels of government departments, the executive has become the main elements of the provisions of the tax, which is surely the constitutional principles of modern taxation contrary.
1984 年 business tax reform, the State Department had authorized the National People's Congress request Posted trial on tax regulations (draft) motion to get the Sixth National People's Congress authorized the tenth meeting. Although the enabling legislation is not yet meet the strict sense of the constitutional principle of taxation, but that is a historical progress . but unfortunately, since then, the process of enabling legislation actually stopped, the government of a tax almost unchecked power. years after the major 1994 tax reform, the State Council formulated a series of provisional tax provisions, there is no legislative basis for requirements.
If necessary, the Government would like to how much tax can be imposed, without any restriction and monitoring of the link. This evolved into the result: the Government's annual budget is to get the NPC to approve the Government decision which taxes and tax rates do not require approval, just out of the NPC, regardless of progress, has become a , into a huge upgrading of enterprises to gain time
Southern Metropolis Daily: If the tax rebate or tax policy, tax structure, what specific adjustments can be made?
Lee Wai-kwong: I now the tax reform proposals is to emphasis the tax system structure. such as vigorously and quickly advance to the personal income tax from the consolidated tax classification of the transition has been difficult to tax evasion, but at the same time strengthening the property tax to reduce production and circulation revenue. In addition, you can consider a windfall profits tax on the monopoly industries, specifically used to improve national welfare.
For businesses, several categories of taxes have a need for reform. such as value-added tax, purchase of fixed assets should pay taxes, which in fact mean it does not encourage people business. in the world, very few to implement VAT production, but China is one. is still engaged in the pilot transition have been completely unnecessary, and should be immediately spread across the country. This year in particular earthquake, many factories have collapsed, many companies have to purchase fixed assets, many companies are stepping up production of the country material support to the disaster area, which is the value-added tax reform pushed to Sichuan, the opportunity to push across the country. The other is the tax structure should be further tax reforms, such as for small businesses and individual businesses in the factors.
the burden of corporate income tax is too heavy. merge the two laws, the tax burden to some extent solved the problem inside and outside the fair, but the rate is still high, the added value last year, corporate income tax rate of 39%, the proportion of total tax revenue even higher than the U.S.. In the past the low level of collection, increase the cost by way of corporate income tax evasion is easier to do, and now more and more difficult for tax evasion, tax burden, of course greatly increased. Therefore, reform of corporate income tax should also continue to further reduce corporate tax burden. Moreover, Chinese companies are also very heavy burden of social security. According to statistics, China's share of corporate pension funds up to pay health care to 40%. in the future as efforts to increase the protection of labor, wages increase, social security contributions of enterprises will increase, the burden will be heavier.
addition to reducing tax rates, the readjustment of irrational tax structure, simplify the collection and management tools to reduce the variety of non-standard non-tax revenue, also has a tax effect.
personal income tax also need to make further adjustments, should further improve the tax standards. inflation so that every family is spending a few hundred dollars more than the daily fee, which is a relatively wealthy family does not pose a threat, but the largest proportion of the population in the lower income earners have it?
a tax principle of taxation: First, you can not sign and maintain their own basic needs of citizens of the expenditure part; second, does not affect citizens of all walks of life together to enjoy the fruits of economic and social development; Third, the government can not just their own increase revenue and set the imbalance of society regardless of income level. Obviously, such a measure, our current tax policy is a harmony and stability, in fact contrary to the purpose of personal income tax.
Unfortunately, the standard levy a tax of 800 yuan to 1,600 yuan from 2,000 yuan and then, how these standards are established, are not clear announcement is neither Taking into account the country's income and cost of living differences across the board, not imposed by the family. exempt from the standard amount of a tax reform is the most simple question, but in China has become very complex, confusing.
South City News: In the current macroeconomic situation, if the tax cuts and tax rebates will be What are the benefits?
Li Wei light: a lot of disposable income of the government, sometimes not promote, stimulate economic growth, but inhibit the consumption. This China's rapid economic growth can not tell when. And once the economy slowdown, which may be two or three years China is likely to occur, the shortcomings of China's tax burden is too heavy will be exposed. high taxes, low welfare is actually a national wealth unfair distribution.
the Chinese economy, in order to maintain a healthy and rapid development of enterprises, especially the most important development of private enterprises. Only Chinese private enterprises to grow stronger, the Chinese can talk about really strong. This year, inflation control in China The main control means is a tightening of monetary policy and price controls. that such a sweeping monetary tightening, credit tightening and yuan appreciation, energy and raw material prices, rising labor costs together with private enterprises is increasing, especially in the manufacturing sector difficulties. This time, private enterprises will be reduced or refunded in the industrial upgrading and adjustment of gain time and space.
strive to build China into a constitutional framework of a light-duty National
Southern Metropolis Daily: In fact, the tax system in China structure, the actual collection object is in the low-income people, while the high-income groups and monopoly industries, the lack of effective control, this is often criticized.
Lee Wai-kwong: access to financial income tax system now features the most prominent, but regulation of the social role of the wealth gap is almost zero. otherwise the Chinese community would not be so overcharging like that performance, but on how to reflect inadequate attention to the fairness of the tax system. This income tax principles and contrary to the fundamental principle of capacity to pay.
maximum personal income tax issues. China has been divided into classes by personal income , respectively, the classification of income tax system, it is only conducive to the tax authorities collect taxes, not much to adjust income distribution function. today's world where the introduction of a tax countries, mostly the implementation of comprehensive income tax system, or a combination of category and comprehensive mixed income tax system, we are still holding tightly tax classification is clearly inappropriate. even though China was a hybrid income tax system to determine the direction of reform, but too slow, now just a little concession raised the standard.
from the whole tax structure, low proportion of direct taxes, particularly the proportion of income from low income class, will also affect the effect of the tax system fair play. Although the in the direction of, but not enough. from the whole tax system point of view, an unfair tax burden remains a serious problem. If the excessive tax incentives, the implementation of two sets of urban and rural tax system, tax rates, tax benefits and costs of the standard deduction different, leading to different regions, the tax burden on enterprises of different ownership are quite different, incompatible with the principle of national treatment, is not conducive to fair competition among enterprises.
Southern Metropolis: a practical dimension is introduced in China based indirect tax system is one big problem is that taxes can be passed on the final consumers. The current Chinese government is committed to strengthening the collection of direct taxes, indirect taxes and direct taxes is equal both to the direction of development, which will actually increase the taxpayer's burden? If increased, how the path of reform designed to avoid such a situation occur?
Lee Wai-kwong: Good question! current tax revenues, the proportion of indirect taxes has been stubbornly high, accounting for more than 70%. As the proportion of large so-called 19.2% of total tax revenue, an increase of 37.9% over the previous year; personal income tax accounted for 7%, an increase of 29.8%. These two taxes combined, the proportion exceeds the proportion of value-added tax 21.6%.
you ask The What are the results? people will naturally feel the pressure of heavy taxes. on the road to take, is equal to improve the proportion of income class, and ultimately reduce the total abolition of all non-normative nature of the administrative charges for the future transition to income taxes in the tax system as the main lay a good foundation.
addition to the defects mentioned above, the current China there are local tax system is imperfect, the Central tax and local tax issues such as the division is not reasonable. can be said that the current tax system need not meet the economic and social development aspect is rapidly amplified, must be reformed, and is comprehensive reform, is not shy of the money in his pocket and then pull out, it may not be happy.
Lee Wai-kwong: Government of collecting the real money, of course, do not want to reduce the funding available. tax cuts and rebates, in theory is easy, but very difficult, if implemented, mainly constrained by the existing system. It needs fundamental change and reform the system, related to the functions of government and the positioning of the NPC, the NPC comes to play in fiscal policy and tax policy on the monitoring role. In within the framework of China's current system, most likely prompted the Government to make policy change is the National People's Congress. We, academics, media people and all you taxpayers, we can do is appeal to the constitutional framework of China's early establishment of a modern tax system must strive to build China into a light tax countries.
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