Jiao Ruijin, former deputy secretary-general of the Academic Committee of China Taxation Society and director of China Taxation Society, pointed out in an interview with 2 1 Century Business Herald that the focus of the next round of tax reform is not only to raise the tax threshold, but more importantly, to adjust the tax according to the family's burden and family's income, and to rationally design the tax distribution relationship between labor income and wealth income. In the future, it is not necessary to directly emphasize increasing the proportion of direct taxes, but to increase fiscal revenue through a wide tax base and low tax rate.
Talking about the collection of the "rich tax", Lin Jiang, a professor in the Department of Economics of Lingnan College of Sun Yat-sen University, told 2 1 Century Business Herald that if we want the three distributions to play an active role, we should first introduce and improve the real estate tax and inheritance tax. Because the secondary distribution with tax as the main body is mandatory and unconditional, while the tertiary distribution characterized by donation and charity is actually based on the principle of voluntariness and consciousness. If the tax system representing the secondary distribution is incomplete, it will directly affect the effectiveness of the tertiary distribution. Jiao Ruijin also suggested that we should pay attention to whether the "rich tax" can play a better role in the future.
We will build basic institutional arrangements for the coordination of primary distribution, redistribution and tertiary distribution, increase the adjustment of taxation, social security and transfer payment, and improve accuracy.
* * * Three distributions under the same affluence
China's tax system is reforming towards the idea of reducing indirect taxes and appropriately increasing the proportion of direct taxes.
On February 23rd, 2020/KLOC-0, Minister of Finance Liu Kun wrote the article "Establishing a Modern Fiscal and Taxation System", which pointed out that taxation is an important tool for the state to implement macro-control and adjust income distribution. During the "Fourteenth Five-Year Plan" period, it is necessary to establish and improve a tax system that is conducive to high-quality development, social equity, and unified market, optimize the tax structure, and at the same time improve the efficiency of tax collection and management. In addition, it is necessary to improve the direct tax system and gradually increase the proportion of direct tax.
Under the background of promoting prosperity, how should China's tax reform go?
The tenth meeting of the Central Committee of Finance and Economics pointed out that it is necessary to adhere to the people-centered development idea, promote prosperity in high-quality development, correctly handle the relationship between efficiency and fairness, build basic institutional arrangements for the coordination of primary distribution, redistribution and tertiary distribution, and increase the adjustment of taxation, social security and transfer payment and improve accuracy.
Jiao Ruijin, former Deputy Secretary-General of the Academic Committee of China Taxation Society and director of China Taxation Society, pointed out in an interview with the reporter of 2 1 Century Business Herald that the concept connotation of tertiary distribution is to co-ordinate the relationship of tertiary distribution and promote the prosperity of * * * instead of simply solving the gap between the rich and the poor through tertiary distribution. The spirit of "three distributions" put forward by the central government includes designing the first, second and third distributions well, so as to improve the national governance system and promote the high-quality development of prosperity.
Among them, in the second distribution, a fairer income distribution can be achieved by gradually improving the social security level, using tax adjustment and optimizing the tax system. The third distribution is for donations used for public welfare undertakings, which strongly encourages tax exemption and allows more people to use their property for public welfare undertakings and social development. Jiao Ruijin believes: "Making good use of the three distribution relations is not only to narrow the gap between the rich and the poor, but also to promote the prosperity of the two countries."
Wang Yong, vice president of Peking University New jiegou Research Institute, also believes that there is still a lot of room for improvement in the two aspects of "income" and "expenditure" in the secondary distribution and the tertiary distribution, provided that the importance of the primary distribution cannot be denied. In the tax system reform, we should change more from enterprise taxation to individual taxation, so that local governments can pay more attention to people instead of attracting investment under the given conditions, thus breaking the disunity of the national labor market and breaking the household registration restrictions.
Wide tax base and low tax rate
The reform of personal income tax will be promoted in due course.
Liu Kun clearly pointed out in the article "Establishing a Modern Fiscal and Taxation System" that during the Tenth Five-Year Plan period, it is necessary to improve the direct tax system with income tax and property tax as the main body and gradually increase its proportion in tax revenue. Further improve the personal income tax system that combines comprehensiveness and classification. We will promote the reform of individual income tax in a timely manner, reasonably expand the scope of income included in comprehensive taxation, improve special additional deductions, and improve the policy system for attracting high-end talents from abroad.
The seventh overhaul of the tax law raised the basic deduction to 60,000/year, and for the first time, it added six new special additional deductions, including children's education, continuing education, serious illness medical care, housing loan interest or housing rent, and supporting the elderly.
Jiao Ruijin believes that the focus of the next round of tax reform is not only to raise the threshold for taxation, but more importantly, to adjust taxes according to the burden of families and their income, and to rationally design the tax distribution relationship between labor income and wealth income. At present, both social security and individual tax adopt a unified tax base, and the burden on ordinary workers will be heavier than that on high-income earners.
China is further improving the personal income tax system that combines comprehensiveness and classification. Jiao Ruijin suggested that in the future, whether the tax burden of labor remuneration should be reduced, and the tax proportion of investment income should be increased, and the distribution structure should be adjusted through different income classifications. After the social wealth or per capita wealth reaches a certain level, the proportion of direct taxes will naturally increase, and the application of digital means will be able to more effectively grasp the actual income of residents. In the future, it is not necessary to directly emphasize increasing the proportion of direct taxes, but to increase fiscal revenue through a wide tax base and low tax rate. For value-added tax, the rate may be further reduced in the future. Through consumption tax, etc., it is collected in the final retail link, thus ensuring the country's fiscal revenue more efficiently.
Talking about how the individual tax reform adapts to the concept of * * * with prosperity, Lin Jiang, a professor in the Department of Economics of Lingnan College of Sun Yat-sen University, told the reporter of 2 1 Century Business Herald that the practice of six special additional deductions for individual tax could be further improved during the 14 th Five-Year Plan period. At present, although the six special deductions are relatively complete in content, which can basically reflect the needs of taxpayers in the fields of basic living, supporting the elderly, raising children and personal education, some principles reflected by the relevant special deductions are still vague and need to be clarified; Secondly, further simplify the seven-level progressive system of individual tax and turn it into a tax system with fewer levels. When the tax payment cost is reduced, the taxpayer's willingness to pay taxes is correspondingly improved, and the tax authorities can receive more individual taxes, so that the government departments have more disposable financial resources to narrow the social income distribution gap through transfer payments and other means; In addition, the way of personal income tax collection and management should be gradually changed from withholding to individual automatic declaration.
Optimize marginal tax rate
At present, the highest marginal tax rate stipulated in China's individual tax laws is still 45%. In the last revision of the tax law, there was a lot of controversy. Some people think that excessive marginal tax rate is not conducive to talent introduction and international competition.
Jiang Jianping, former chairman of the Financial and Economic Committee of Jiangsu Provincial People's Congress, pointed out at the Sixth Financial and Economic Development Forum that the marginal tax rate of personal income tax for high-end people is still high, calling for a reduction to the tax rate of 38.2%. Shi Li, Executive Dean of China Institute of Income Distribution, Beijing Normal University, also believes that treating high-level talents as a special preferential group is really good for promoting innovation and attracting talents.
As for the tax reform during the 14th Five-Year Plan period, many interviewed experts believe that the marginal tax rate of 45% has not been effectively applied.
Jiao Ruijin said that in actual work, taxpayers will adjust the distribution relationship according to their own income. If the marginal tax rate of 45% is reached, taxpayers will often pay more income at a lower tax rate through registered wholly-owned enterprises and individual industrial and commercial households.
Lin Jiang also pointed out that the highest marginal tax rate of 45% is actually difficult to implement. Because ordinary people can avoid the highest marginal tax rate of 45% as long as they don't pay themselves more than100000 yuan a month and the extra income is returned to the taxpayer in other welfare forms.
2 1 Century Business Herald The reporter noted that in recent years, Guangdong-Hong Kong-Macao Greater Bay Area, Lingang New Area, Hainan Free Trade Port and other places have introduced preferential tax policies.
Lin Jiang believes that it is very important for the relevant regions to attract outstanding talents to work and live by starting to try relevant preferential tax practices in some pioneering areas and demonstration areas. He suggested that from the realistic situation, it is better to adjust the marginal tax rate of 45%. The general trend is to lower the tax rate, for example, to 35%, and then cooperate with the adjustment of individual tax income categories (taxation according to large categories of income) and strengthen the collection and management, so that those who are lucky enough to evade taxes will retreat. We can basically achieve the goal that individual taxes reflect the principle of social equity.
How can wealth be used to contribute to social development?
In order to build * * * with prosperity, Jiao Ruijin believes that tax reform should enrich taxpayers' income sources and total amount from a longer-term perspective. For example, increase the income of taxpayers through social development and rural revitalization. For example, high-income people can invest in some enterprises and projects to drive low-income groups to get full employment and change the situation of single agricultural production. "This is also a form of wealth distribution in society. The future social governance system should encourage high-income groups to participate in more projects with their own income." He said.
The tenth meeting of the Central Committee of Finance and Economics pointed out that it is necessary to strengthen the regulation and adjustment of high income, protect legitimate income according to law, reasonably adjust excessive income, and encourage high-income people and enterprises to return more to society.
Liu Kun also proposed in the article "Establishing Modern Fiscal and Taxation System" that the legislation and reform of real estate tax should be actively and steadily promoted according to the principle of "legislation first, full authorization and step-by-step advancement". Establish and improve the personal income and property information system.
Does this mean that the legislation of "rich tax" such as real estate tax and inheritance tax is "imminent"?
Lin Jiang said frankly that if we want the three distributions to become an important starting point for promoting social prosperity, we should first introduce and improve the real estate tax and inheritance tax. Because the secondary distribution with tax as the main body is mandatory and unconditional, while the tertiary distribution characterized by donation and charity is actually based on the principle of voluntariness and consciousness. If the tax system representing the secondary distribution is incomplete, it will directly affect the effectiveness of the tertiary distribution.
Lin Jiang said: "As the most important and stable source of income for local governments, real estate tax is just the best channel to provide local governments with high-quality public services for financing. The higher the supply level of local public services, the more people live and work in peace and contentment, and the more they can achieve the goal of * * * being rich together."
Jiao Ruijin further mentioned that if the wealth of high-income earners is used for real estate speculation, it is necessary to increase taxation on these behaviors, and "do not speculate in housing". But at the same time, the rich tax is not simply levied, but depends on whether the "rich tax" can play a better role after it is levied. Can these assets be put into production and operation after being expropriated to create more wealth? Which way is more conducive to social development? If this goal can be achieved through three distributions, it is not necessary to solve the problem by levying a "rich tax".
For example, on August 18, Tencent announced that it would increase its capital by another 50 billion yuan, launch the "Special Plan for Prosperity with the Same Prosperity", and provide continuous assistance in areas of people's livelihood such as rural revitalization, income increase for low-income people, improvement of primary health care system, and balanced development of education. Within four months, Tencent has continuously planned to invest 1000 billion yuan. Jiao Ruijin believes that not only individuals, but also high-income enterprises can take out their own income to participate in more projects and support social development.