The Way To Solve The Problem Of Income Distribution Reform: Whether To Pay Taxes Or Raise Taxes?

The reform of income distribution is getting closer and closer.

In May, Wen Shizhen and Wu Xiaoling, vice chairman of the finance and Economic Commission of the National People's Congress, carried out intensive research on the two groups.

At the same time, the national development and Reform Commission, the Ministry of finance, the Ministry of human resources and social security also launched research.

With the investigation and discussion of various ministries and commissions, our reporter learned from the relevant ministries and commissions that the draft reform of income distribution drafted by the national development and Reform Commission is nearing completion.

"At present, policymakers in the reform of income distribution pay more attention to the field of primary distribution."

A person from the finance and Economic Commission of the National People's Congress told reporters that the reform program will focus on improving the income level of low-income people and give full play to the basic regulatory role of the market for the initial distribution.

Wu Xiaoling has revealed an important conclusion of the National People's Congress's investigation, that is, to reduce the tax burden of the competitive industry enterprises and make room for the employees to increase their wages.

The reporter learned from the Ministry of human resources and social affairs that this proposal has also been endorsed by some ministries and commissions.

The suggestion has also aroused heated debate.

Reporters recently surveyed in the enterprise, most of the owners think that the current tax burden is too high, so for the reduction of tax agreement, but feel that "tax for salary" operational problems difficult to solve.

At the same time, the employees of enterprises doubt whether the enterprises can raise their salaries autonomously and the implementation of "tax to pay".

Ye Qing, deputy director of the National People's Congress and deputy director of the Hubei Provincial Bureau of statistics, pointed out to reporters that the process of "converting taxes into wages" should be reversed. The government should encourage enterprises to increase their employees' remuneration, and accordingly take tax relief for enterprises that raise salaries, which is "raising salaries and letting taxes".

The autonomy of "converting taxes into salaries" is in the hands of enterprises, but the initiative of "raising salaries and letting taxes" is in the hands of the government.

Ye Qing said that the reform of the initial distribution and redistribution areas should be combined and go hand in hand.

1. heavy taxes and fees

"Structural tax cuts are often structured tax increases."

A person in charge of a Suzhou enterprise told reporters that last year, due to the reduction of revenue, both the state and local governments increased the tax collection.

Manager Liu is the chief executive of a company in the core area of Lujiazui. It is said that the boss is actually four people. His business is spread throughout Shanghai, and even many overseas customers: because his business is helping people register companies.

This authentic Shanghai people have a mantra: business is not good, and the province must be saved.

He said saving money means "how to avoid heavy taxes". In his view, this is also the most concerned problem of all kinds of bosses of registered companies.

Because of this, Liu is very familiar with remote areas such as Shanghai, Chongming, Songjiang and Jiading, because "companies that register there can pay less taxes."

According to Liu's general practice, he always advises clients to register in the suburbs, because the urban tax burden is very heavy. "I would like to register as a trading client in Hongkong or a British Virgin Islands, where taxes are lower."

In Liu's view, the tax burden of domestic enterprises is indeed heavy, especially for small and medium enterprises. "Private enterprises in the past have generally adopted some methods to avoid tax, but now Shanghai is implementing tax control machines, and it is very difficult to operate."

In fact, the tax burden of SMEs is not only serious, but also large enterprises generally reflect serious taxes and fees.

Huainan Mining Group is a large enterprise. It is one of the 520 large enterprise groups in the country and one of the 17 key enterprises in Anhui province. The number of workers is up to more than 120 thousand, directly engaged in more than 110 thousand industrial production and 3377 engineering and technical personnel.

When the Anhui provincial government officials investigated the Huainan mining group, according to an official who participated in the investigation, the Huainan mining group reflected the heavier tax burden.

"Since January 1, 2009, the implementation of the value-added tax reform has played a positive role in reducing the burden on manufacturing and other industries. However, the mining industry, especially the coal industry, has increased its negative burden instead of reducing its burden."

Huainan mining industry said.

There is some truth in that.

Because the VAT is allowed to deduct, the processing trade enterprises will have input and output, input tax and output tax. The two deduction is that the actual payment tax burden can be zero theoretically; while Huainan mining industry is a resource enterprise, its coal and so on are products, not purchased, and the output tax is much, and the input tax is few.

According to a set of data released by the NPC deputies Geng Huai, the actual value-added tax rate of Industrial Enterprises above Designated Size in 2007 was only 3.41%, while the actual value added tax burden of ten coal enterprises surveyed was higher, and the average value-added tax in 2007 and 2008 were 10.4% and 10.7% respectively.

And after 2009, the tax burden of coal enterprises increased further. By 2009, the tax rate rose to 17%, which made the tax burden of coal enterprises much heavier.

"Structural tax cuts are often structured tax increases."

A person in charge of a company in Suzhou told reporters that last year, due to the reduction of revenue, both the state and local governments increased the tax collection effort, making the enterprises in the crisis miserable.

In addition, in the survey and suggestions put forward by the finance and Economic Commission of the NPC and the Ministry of personnel and social affairs, more proposals were put forward to reduce the tax burden so as to encourage enterprises to raise their wages.

It is a typical example of the burden that some enterprises do not pay attention to.

A province in eastern China organized government personnel to conduct routine research on the subordinate state-owned enterprises, and found that enterprises generally reflected that the quality inspection was too frequent, too many testing types, too high fees, and the enterprises were overwhelmed.

This survey has a result: 70% of enterprises in production enterprises reflect the problems of quality inspection departments, the first is the necessity of inspection and the two is the reasonableness of charges, both of which aggravate the burden of enterprises.

"A company with a sales income of 10 million yuan has a million dollars per year, and quality inspection is the most strongly reflected department in our inspection."

One of the officials involved is giving an example to our newspaper reporter.

In fact, only lowering the tax burden can only partially reduce the burden on enterprises, and the greater burden is the burden on enterprises.

"Fees are not standardized, and enterprises are unpredictable.

Enterprise budget can not be accurately measured, and tax, enterprises can make a budget through technical means.

The officials involved in the investigation told our reporter.

Even for more stringent taxes, the general enterprises have corresponding reasonable means of tax avoidance, but for fees, enterprises simply can not escape.

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2. "tax for salary" practice: how to make the money from the left pocket to the right pocket?

Several officials and scholars interviewed thought that Wu Xiaoling and others had a good suggestion, that is, the right pocket of left pocket.

But the question is coming. Who can ensure that the money in the left pocket can really be pferred to the right pocket?

The allocation and regulation between enterprises and employees in the initial distribution area is closely related to the allocation and regulation of the government and enterprises in the process of redistribution.

The latter's system design is often the key to the success or failure of the reform.

For the way of "converting taxes into wages", Ms. Cai, director of Hongyang Electronics Co., Ltd., Changzhou, said that according to her experience, the national tax reduction rate can not be too large, and the effectiveness of the policy has become even smaller at the level of small and medium-sized enterprises.

Ms. Cai's salary is calculated according to the piecework method.

In the pay system with more work and more pay, improving the piecework remuneration means increasing the cost of the manufacturing process directly. In this case, if we want to raise the salary, it means that the tax should have a corresponding tax return ratio, which is generally not possible for the enterprise to make the enterprise separately according to its manufacturing cost.

"Our scale is small, the tax revenue is relatively not very high, the corresponding relief space is not big, but if we force the wage increase, our cost pressure will increase a lot."

Ms. Cai said.

Moreover, large companies are managed in accordance with institutionalized management, tax return procedures are easy to operate, small and medium-sized enterprises are more flexible, and their performance fluctuates greatly, so they are difficult to calculate and operate.

The way of "converting taxes into salaries" may be more suitable for large companies, especially large enterprises with high labor productivity.

Ms. Cai said that large enterprises had a large amount of tax revenue in one year, and a large amount of tax relief was made after a scale. As a result of the relatively stable performance of large enterprises, some of the tax deductions would be partially improved to improve the remuneration of workers.

However, the industry is worried that because large enterprises have a large proportion of China's enterprises, if they are implemented in large enterprises alone, they will also arouse social doubts about the already high salary level of state-owned enterprises.

At the same time, the employees of enterprises doubt whether the enterprises can independently reduce their salaries and the implementation of "tax to pay".

An employee of the business department of Jiangyin Bao Hong Textile Co., Ltd. said that the current revenue structure is the basic wage plus royalty.

"Wages are wages, taxes are tax, and tax relief is only a tax relief for company bosses."

The employee believes that it is hard to say that it is not feasible to raise staff salaries in the end.

"Tax payment is mandatory for enterprises to pay taxes, but wage increases are independent behaviors and rights of enterprises."

He said.

Li Weiguang, a professor at Tianjin University of Finance Economics, agreed to narrow the income gap through initial distribution.

"The government can reduce the tax revenue of enterprises and reduce the number of enterprises in the initial distribution process, leaving more to the enterprises, so that enterprises can be motivated to raise wages for their employees."

But at the same time, he stressed that there are two premises. First, the government should have the will and determination to cut taxes for enterprises. Second, government regulation must not be lost. It is difficult to say, but it is not difficult to say.

Several officials and scholars interviewed thought that Wu Xiaoling and others had a good suggestion, that is, the right pocket of left pocket.

But the question follows. Who can ensure that the money in the left pocket can really be pferred to the right pocket? Because the tax is redistribution, wages and so on are the primary distribution, and in fact, in reality, the initial distribution of the initiative is too much, which in part causes the wages of workers to keep up.

An official gave an example to our newspaper reporter: for example, the minimum wage, paid vacation and other lines stipulated by the state are usually implemented by enterprises independently, but many enterprises do not implement them at all.

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3. sovereignty falls on the government: "raise salaries to make taxes" is better than "converting taxes into salaries"?

The autonomy of "converting taxes into salaries" is in the hands of enterprises, but the initiative of "raising salaries and letting taxes" is in the hands of the government.

This is the fundamental difference.

Ye Qing, deputy director of the National People's Congress and deputy director of the Hubei Provincial Bureau of statistics, said that because the government is in charge of redistribution rather than the initial distribution, the way of "converting taxes into salaries" is not feasible. It is better to raise the basic wages directly and to reduce the effect of personal income tax.

"Or, we should change taxes to pay" in a way to encourage enterprises to increase wages, and then exemption from corporate tax according to the extent of wage increase.

Ye Qing thinks that the way of "raising salaries and letting taxes" is more maneuverable.

The autonomy of "converting taxes into salaries" is in the hands of enterprises, but the initiative of "raising salaries and letting taxes" is in the hands of the government.

This is the fundamental difference.

In addition, Ye Qing suggested that the minimum wage standards should be adjusted annually according to the level of economic development and the speed of inflation.

At present, the minimum wage standard set by Shanghai is the highest, reaching 1120 yuan / month, but it is obviously too low in other places, for example, Shenzhen is only 900 yuan.

"If wages are to win over CPI, otherwise, even if income is doubled, it is still impossible to fulfill the mission of distribution reform."

Ye Qing, who has statistical background, emphasized that the minimum wage should be linked to the inflation rate.

In 2009, China's money supply increased by 27.68% compared with the same period last year, and China's GDP grew by 8.7% in the same year.

Last year, the official statistics of CPI were -1.9%, but the real inflation rate of the past few years was very high considering the amount of currency and multiplier factors.

Yin Xingmin, a professor at Fudan University's China socialist market economy research center, also believes that the premise of implementing the income doubling plan is to see whether it squeezed the moisture of inflation.

In addition to winning the CPI, an important goal of income distribution reform is to keep pace with economic growth and fiscal revenue growth.

Hubei Provincial Bureau of statistics has investigated the growth of residents' disposable income and fiscal revenue and GDP in recent years, and found that the growth of residents' income lagged behind the growth of local finance in recent years.

From 2001 to 2007, the annual budgetary revenue of local finance in Hubei increased by 15.6% annually, while the per capita disposable income of urban residents increased by only 14.7% in the same period, lagging behind the local fiscal growth by 0.9 percentage points.

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4. the way to break the situation: should the central government cut out more?

"The longer we drag on, the lower marginal benefits of reform will be even more difficult when we want to do it."

The official said.

It has been nearly half a year since the Central Committee proposed this year to promote the reform of income distribution.

With the recent intensive research by the NPC and government departments, the expectations of the society are being pushed to the top again.

But this reform, which has been entangled in reality for many years and is slow in progress, is the key to breaking the board.

Yao Xianguo, executive vice president of School of economics, Zhejiang University believes that changing the distribution system must start with the economic operation mechanism, first change the development strategy, and then carry out the system reform.

"At present, many places in 12th Five-Year plan to invest mainly, and pursue big industries and large platforms. If policies do not tilt towards income distribution, they will always give profits to capital, which will lead to further widening the gap between capital gains and laborers' income."

Yao Xianguo said that the irrational operation of the economy has caused the problem of resource allocation, and that the adjustment of income distribution must take steps to pform the way of production and development.

As for the weight assignment of initial distribution and redistribution, many experts believe that we should start with the redistribution stage, expand the coverage of social security, and establish a universal social security system.

In addition, the equalization of basic public services should be realized, including education, medical treatment, social security and social assistance.

The central government should assume the main role in the reform of income distribution.

Li Weiguang believes that this is determined by the division of functions of the central government.

From the attribution of responsibility and the controlling power of fiscal revenue, the central government will undoubtedly assume the leading role in the reform of income distribution.

In the division of government functions, the central government is responsible for macroeconomic and social allocation and regulation. Local governments are responsible for providing public services to the local government.

In addition, due to the unreasonable distribution of financial power in the central government, the debt of local governments is heavy.

On the other hand, local investment impulses, and the soaring local debt also shows that even if local governments want to push forward reform, they will be more than enough.

No matter how the reform moves in, speed up the pace of reform and strengthen the reform, all parties think it is the urgent task.

"The current issue of distribution is very urgent, and it is still in the stage of investigation and discussion, which is nothing more than the process of coordinating the distribution of various interest groups."

Li Weiguang bluntly said that many interest groups, especially the government and state-owned enterprises, should not try to figure out how to maintain their vested interests in reform.

A local official also warned that because of the widening income gap, the estrangement between the ruling and ordinary people is gradually taking shape. "The reform of income distribution can no longer be delayed. We must do it right away and do it with great efforts."

The official believes that after the central government promulgated the macro-control policy, local governments and enterprises often took a wait-and-see attitude instead of responding immediately.

Therefore, if the central reform continues to be low, local governments and enterprises will often weaken the effect of reform.

"The longer we drag on, the lower marginal benefits of reform will be even more difficult when we want to do it."

The official said.