The significance of personal income tax threshold

The “one size fits all” tax threshold is controversial

Moderator: Because different regions have different levels of economic development, is the “one size fits all” tax threshold for this personal tax reform reasonable? ?

Jin Dongsheng: Relatively speaking, implementing a unified deduction standard is more reasonable and consistent with the principle of fairness. This is also an international practice. Because the biggest advantage of this is that it facilitates national management.

Once the tax thresholds of various regions are fluctuated up and down, each region will often not be subject to any restrictions and will often exceed the floating range, affecting local fiscal revenue, thereby increasing poverty and affluence. Regional differences.

Meng Tianyun: I think that implementing a unified personal tax threshold is unfair to society. At present, there are relatively large differences in economy and income among various regions across the country, and development is uneven. For example, the per capita income of Shandong Province is more than double that of Shanxi Province. In this case, the implementation of a unified starting point is not conducive to the balanced development of society.

Zhu Jinling: The personal tax threshold should be allowed to fluctuate within a certain range in various localities. A very important function of personal income tax is to adjust the gap between rich and poor and balance secondary distribution. Only by keeping pace with economic development can we narrow the gap between residents in various regions.

Sun Wei: The proposed threshold does not reflect the fairness of tax development and should be higher. It would be unreasonable to implement a “one size fits all” approach to expense deduction standards. At present, the level of economic development in different parts of the country is different, and the exemption amount should take into account the differences in different places. I believe that different types of areas should be divided according to the different economic levels and price indexes of various places, and a reference base for the starting point should be determined. The local legislative body should then based on the actual situation of the local economic development level, on the basis of 1,500 yuan. Implement floating within a certain range.

Personal income tax reform is imperative

Moderator: In what context is this personal tax reform carried out, and what factors have contributed to this personal tax reform?

Jin Dongsheng: Personal tax reform is imperative. Personal income tax originally played the role of adjusting income balance, but now instead of reducing the burden on the people, it has actually increased. The current personal income tax law's threshold standards were formulated in 1980. Twenty-five years have passed, and with the increase in residents' income, consumer spending has increased significantly, far exceeding the monthly deduction standard of 800 yuan stipulated in the Personal Income Tax Law. If the tax is collected according to the original standards, it will obviously lead to a significant increase in the tax burden on the people.

Meng Tianyun: Today, the biggest social problem facing China is the polarization between rich and poor in China. A report recently released by the Ministry of Finance stated that in the past decade or so, the gap in income distribution has continued to widen and the polarization between rich and poor has intensified. The Gini coefficient reached 0.447. According to international practice, if the Gini coefficient reaches or exceeds 0.4, it means that the gap between rich and poor is too large. As one of the effective means to adjust the personal income gap, the adjustment of the personal income tax threshold is mainly to reduce the tax burden of low- and middle-income people and adjust social equity.

Zhu Jinling: The significance of personal tax adjustment is also to change the working class as the main body of tax payment. Statistics from the State Administration of Taxation last year showed that China's personal income tax revenue in 2004 was more than 173 billion yuan, of which 65% came from the working class. The working class has become the main body of taxpayers, which is contrary to the original intention of personal income tax to promote social equity and adjust the gap between rich and poor.

Sun Wei: The biggest drawback of the current domestic personal income tax is that the current tax system does not reflect the principles of fair tax burden and reasonable burden, and does not play its due role in regulating social fairness. First, the working class is overtaxed. Nowadays, the monthly salary of 3,000 yuan to 5,000 yuan for domestic working-class people includes a lot of expenses, such as housing allowances, medical expenses, education expenses, and pension security. This part of the monthly salary is actually just enough for many working-class people to make ends meet, but the current tax system Still tax the rich according to their standards.

Secondly, the focus of adjustment is biased. The middle- and low-income working class are not the targets of personal income tax regulation, but have become the main tax collection subjects. Again, there is a suspicion of reverse regulation, and the secondary distribution is in a "reverse flow" state.

If things go "backwards" for a long time, the rich will only get richer and the poor will get poorer.

Wealth means more social responsibility

Moderator: This personal tax reform has strengthened the supervision of high-income people and requires them to declare automatically. How should we view this change? ?

Jin Dongsheng: The purpose of levying personal tax is to adjust the gap between the rich and the poor and balance society. As the rich occupy social resources and create wealth, they are more obliged to pay taxes, which are then distributed by the government to help the poor and provide them with basic living security and equal opportunities to compete.

Meng Tianyun: Paying taxes is a citizen’s obligation and a responsibility. As long as you are a citizen of a country, you should pay taxes. Of course, for those who are living in poverty and enjoy state relief, that is, citizens below the poverty line, they do not need to pay taxes. This is the significance of establishing a threshold for personal income tax.

As for a person's social responsibility, the rich should have a greater awareness of "the more they work, the more they will get, and the more they will be rewarded". Because the rich accumulate wealth by consuming a lot of social resources, occupying a lot of space, and using a lot of manpower. It should not be mandatory for the rich to pay taxes, but should be done voluntarily.

Zhu Jinling: A country’s democracy, legal system, and civilization are directly reflected in citizens’ awareness of paying taxes. At present, my country's tax law system is imperfect, citizens' tax awareness is weak and imperfect, and tax evasion and evasion by enterprises and individuals is serious.

In China, it seems to have become a common social phenomenon that the rich pay little or no taxes. The wealthy class, as a powerful class in society, has a strong ability to pay taxes and should assume social responsibilities and repay society.

Sun Wei: In a developed market economy, paying taxes is the obligation of every citizen. As long as you get income, you will definitely think about how much tax you should pay. In our country, due to the social credit, personal credit system, personal property registration system, etc., they still need to be improved. In addition, citizens' awareness of paying taxes is still relatively weak, making the collection of personal tax somewhat compulsory.

More wealth means more social responsibility. In developed countries, tax-related donation systems can obtain corresponding returns. For example, enterprises and individuals can receive tax-free treatment when donating to charities and public welfare undertakings. In the future, China can learn from the experience of Western countries and cultivate the enthusiasm of wealthy people to donate.

High taxes should bring high welfare

Moderator: Do the social welfare we enjoy correspond to high taxes? Is there any gap?

Jin Dongsheng: The personal income tax reform is carried out in stages, but the ultimate goal is to improve the tax system that regulates personal income distribution and better play the role of taxation in regulating income distribution. In other words, high taxes should be fed back to society and bring correspondingly high welfare to the people.

Meng Tianyun: Paying taxes is the obligation of citizens. In turn, the government should also provide taxpayers with relevant public products and public services. Because the government has more disposable income through taxation, the government should provide certain services when citizens have daily needs. For example, after the 1990s, our country implemented reforms in medical care, housing, education, etc., which increased the burden on the people. The country should increase payments to low-income people. People should be made aware of where the taxes I pay are used.

Zhu Jinling: Taxation should be "taken from the people and used for the people." At present, the personal income tax law only plays a role in regulating the income of urban working-class people. Even within this range, it is only a high tax burden on high-wage earners without corresponding social returns. In some high-welfare countries such as Northern Europe, although taxes are high, they do not become a burden to the people. On the contrary, the people can benefit from this "high tax and high welfare" system.

At present, the people in our country lack the sense of benefit brought by this tax adjustment in terms of major life benefits such as education, unemployment, medical treatment, and housing.

Sun Wei: At present, everyone is more concerned about the starting point. I think it is meaningless to blindly pursue the starting point. One of the current difficulties faced by the revision of the personal income tax law is the improvement of social welfare corresponding to taxation.

In fact, the amount of personal tax exemption is not important. The key is whether high taxes can bring higher social welfare benefits to the people. That is to say, what Mr. Zhu just said is that taxation is “taken from the people and used for the people.”

Adjusting the gap between rich and poor cannot rely solely on personal income tax

Moderator: How can this personal income tax reform fulfill the important mission of making "social equity"?

Jin Dongsheng: The adjustment of the personal tax threshold is an important step in the reform of personal tax. It also lays the foundation for the realization of a tax system that combines comprehensive and classified personal tax. The most appropriate way to combine comprehensive taxation and classified taxation is to include five items of income from wages and salaries, income from production and operation, income from labor remuneration, income from property leasing and income from property transfer into comprehensive tax, while interest dividends, accidental income Income and other income are still subject to classified taxation. At present, Western countries have implemented a tax system that combines comprehensive taxation and classified taxation. This taxation method will ensure the balance of social income distribution to the greatest extent.

Meng Tianyun: In view of the fact that there are still many social problems, the direction of personal income tax reform should be to establish a fair and just personal income tax system based on the principle of "fair tax burden and reasonable burden". As conditions gradually mature and tax collection and management conditions are improved, only through the establishment of a multi-link, multi-tax system can the reasonable adjustment of individual income gaps be effectively achieved. The direction of reform should be a gradual transition from income tax to a combination of income and property taxes, that is, not only taxing the income part, but also taxing the stock part of the property.

Zhu Jinling: In fact, to truly narrow the gap between the rich and the poor, it is important to reduce taxes on the working class, but from the perspective of balancing social distribution, how to bring high-income earners into the scope of more stringent tax law supervision and management This is the key to individual income tax adjustment and the ultimate direction of individual income tax reform.

Intensify the regulation of high-income earners, study measures and introduce new means in tax collection and management, and strengthen the management of independent taxpayers such as high-income industries, high-income individuals, key taxpayers, and individual investors, Improve the filing system for key taxpayers to narrow the gap between the rich and the poor as much as possible and promote the harmonious development of society.

Sun Wei: Adjusting the gap between rich and poor cannot rely solely on personal income tax. At present, there are relatively few taxes in my country that directly regulate the distribution of personal income, mainly property and behavioral taxes such as personal income tax, real estate tax, and vehicle and vessel tax. A systematic personal income adjustment tax system has not yet been formed. To this end, on the basis of reforming the personal income tax system, it is necessary to levy inheritance tax and gift tax in a timely manner, use personal income tax and inheritance tax for double tax adjustment on high-income earners, improve the real estate tax system, establish a social security tax system, and expand the scope of social security. Establish and improve the social security system for low-income urban residents and continuously improve the consumption tax system.