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Individual Tax Law Should Care For The Middle Class.

2011/4/25 9:36:00 38

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Personal Income Tax Law Low Income Financial Crisis

Last week,

Personal income tax law

The draft amendment was first submitted to the National People's Congress for consideration.

The Ministry of Finance explained that the implementation of the tax adjustment policy is expected to reduce taxes to 120 billion yuan.

There is no doubt that this is a "red envelope" that the government has given to the public.

Judging from the adjustment plan, the middle and low income class is the biggest beneficiary.

The abolition of the 15% and 40% tax rates has resulted in a 10% adjustment in the previous 15% tax rate.

Low income group

The target of income will be applied to the 40% tax rate and the 45% tax rate, which reflects the intention to control high income.

This is consistent with the general plan of China's income distribution reform.

However, there is not much benefit that the middle-income class can enjoy in this personal tax law, and the tax burden of some people may increase. This is worth discussing carefully.

According to the draft submitted by the Ministry of finance to the National People's Congress, the 20% tax rate is still applied to a small proportion of those who applied the 20% tax rate in the past, and most of them were raised to 25%.

Specifically, if you earn 15000 yuan a month, 20% tax rates have been applied in the past. Once the amendment is passed, the tax rate applicable to the future tax payment should be raised to 25%.

The principle of individual tax revision is that "the high income earners pay more taxes, the middle income earners pay less taxes, and the low income persons do not pay taxes". If we can confirm that this interval is a middle-income class, even if we consider reducing the tax level, the abolition of the 15% tax rate is also questionable.

The draft does not clearly define what is meant by high, middle and low income, which may be the reason why middle income people are neglected.

If the wage deduction standard is raised according to the draft, the working class with a monthly salary of less than 4500 yuan will not be taxed. This can be considered as a low income person.

Where is the boundary between middle and high income?

In accordance with the new tax rate, the monthly salary income of more than 12000 yuan, part of the implementation of the wage rate is higher than the original.

For example, the income tax is 12000 yuan -22000 yuan, the original tax rate is 20%, and now it is 25%.

Does this mean that more than 12000 yuan is high income?

But judging from the experience and feelings of ordinary people, this is obviously not the case.

Taxpayers who earn around 10000 yuan a month are mostly concentrated in cities such as Beijing, Shanghai and Guangzhou, and the eastern provinces and regions. These people still belong to the working class with a single source of income. They have houses or cars, but they also carry millions of housing loans and bear rising oil prices.

For example, a worker earning 15000 yuan a month will pay 12975 yuan for tax payment. He has to pay 5000 yuan for housing loans, 3000 yuan for living expenses, and 2000 yuan for pportation expenses and children's education expenses.

Moreover, China does not yet have a pre tax deduction for mortgage and rent payments, which accounts for a large proportion of its income among many middle income earners.

"Expanding the proportion of middle-income people" has been written into the sixteen major political reports of the Communist Party of China. Its importance lies in the fact that it is not only the focus of income distribution reform, but also the key to cultivating an olive type society.

The reform of the individual tax should be taken into consideration.

According to public reports, according to the draft submitted to the people's Congress, more than 94% of taxpayers get preferential adjustment of 5%, 10%, two grade distance. 3% of taxpayers are high income tax payers. This shows that taxpayers who earn 7500 yuan -19000 Yuan account for 3%. Increasing their tax burden is not conducive to expanding the proportion of middle-income people.

Moreover, this group of people is not only small, but also has considerable vulnerability.

financial crisis

In the past two years, what we have witnessed can prove that there are still deficiencies in medical, social security and education. China's middle income earners do not have the ability to resist economic fluctuations. It is easy to slide into the ranks of low-income people, reduce their tax burden and increase their ability to accumulate wealth, which is more important than they get from them now.

If China wants to promote a consumer led economy in 12th Five-Year, it must also do so, because the middle class is the most powerful consumer group.

We look forward to a more active way to "expand the proportion of middle-income people" in the Draft Tax revision law.

We believe that it is more appropriate to retain the 15% tax rate and appropriately expand the 20% tax rate interval.

Perhaps the finance department will temporarily receive less tax, but the tax revenue should be subordinated to the national strategy. A large middle income class is the key to the prosperity of the people.