Li Daokui: Personal Tax Has Become A "Payroll Tax".

The Draft Tax amendment bill is soliciting public opinions, but it has been bombarded by Professor Li of the central bank's monetary policy committee and professor of Tsinghua University.

According to the reporter, Li Daokui issued a signed article in the newly published May issue of "new fortune", "comprehensive tax system reform".

In this article, Li Daokui pointed out that "

In the signed article, Li Daokui believes that under the current tax system, the rate of return on investment is lower than the average tax rate of many people (for example, the tax rate on rent is 5%).

The bigger problem is that capital gains are not taxed.

However, in an interview with reporters, some experts believe that we should not underestimate the long-term impact of reform because of the smaller proportion of personal tax revenue to financial revenue. If we take a one size fits all approach, we will not be conducive to social equity.

Proposal to implement a flat taxation system

In April 25th, the amendment to the personal income tax law (Draft) was published in the China National People's Congress net and was openly invited to the public.

It is understood that the deadline for collection is May 25th.

Li Daokui pointed out that in the context of the current domestic income gap mainly derived from the income of property income, this tax system has no doubt combating labor income, so that the growth rate of labor remuneration of workers is bigger than that of GDP.

Therefore, such a design is very unreasonable, and even can be called "the mentally retarded" personal income tax system. In fact, it has been reduced to a payroll tax, which of course will be criticized by all sectors of society.

In view of the disadvantages of the current tax reform, Li Daokui believes that the current individual income tax system must be comprehensively, thoroughly and systematically reform, not just a partial Tinker.

He suggested that there must be new ideas in individual tax reform.

The new idea is to suggest that China implement the flat tax system.

He put forward his own views.

First of all, at present, China's social foundation does not support Western-style high income tax and highly progressive personal income tax system. It is better to reduce the tax rate of personal income tax substantially, at the same time, to reduce the progressive rate of personal income tax, and to levy taxes on people with a relatively low level (such as a ceiling of less than 20%).

The purpose is to introduce a flat tax system so that the whole society can pay taxes voluntarily without caring about how much tax can be collected.

Second, at the technical level, it is necessary to take into account the income of all residents, including income from wages, capital dividends (such as rent, capital gains, if the negative value added tax can be reduced to a certain extent) and all other income, which must be combined to pay taxes.

At the same time, we should consider the family burden of the people, all the ID card numbers, or be recognized as a tax support for a certain taxpayer, or become the object of collection.

Third, tax rates should be as simple as possible to reduce deductions other than those of non dependant population.

One of the basic lessons of the developed countries such as the United States is that personal income tax can not be a substitute for the government to carry out various specific policies. It is not necessary to repair the personal income tax in the short term because the government needs to encourage or punish certain economic activities.

This will inevitably lead to a substantial increase in the cost of taxation.

For example, he pointed out that there are many examples of successful individual income tax reform. Russia, Singapore, Hongkong and Ireland have implemented a very simple flat tax system. Their highest tax rate is around 15% or even lower.

This not only greatly promotes the taxpayer's active tax payment, but also simplifies the supervision cost of the government. In many places, it eventually plates into the increase of the government's tax revenue.

Therefore, Li Daokui shouted that the reform of personal income tax and partial tinkering not only did not solve the problem, but intensified contradictions and wasted valuable public policy discussion resources, making some more serious problems, such as land finance and resource taxes and fees, unable to be understood in time.

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Experts: the highest tax rate of 45% is high.

In view of Li Daokui's view, in May 2nd, the reporter interviewed many researchers.

Sun Lijian, a professor at the school of finance, Fudan University, told reporters that the current income is becoming more and more diversified. The main problem facing the personal tax system is that the burden of tax burden on entrepreneurs and middle class people is too heavy. In addition, tax enforcement and supervision over capital gains and official income are not conducive to economic vitality and social wealth accumulation.

However, for Li Daokui's point of view, Sun Lijian believes that

At the same time, many experts also said that the tax burden of the middle class is too heavy.

Xie Guozhong, a well-known financial critic, said in an interview with reporters that China's personal income tax rate is too high, the highest marginal personal income tax rate is 45%, on the other hand, in China has a high income class of its own company, their personal income tax rate is equal to 25% of the corporate tax rate.

As a result, China's high tax burden mainly falls on the middle class, especially the employees of large companies.

In this regard, he believes that the government should reduce the maximum marginal tax rate to 25%, and keep the corporate income tax rate at the same time, while increasing the threshold of income tax rates per file based on inflation.

Wang Yongjun, director of the Institute of Finance and taxation, Central University of Finance and Economics, also told reporters that the highest income tax rate of 45% is high, which is a punitive tax rate. The focus of individual tax reform should be on the high-income class.

As for the draft tax bill, why did not cut the highest income tax rate of 45%.

Wang Yongjun believes that a reasonable highest level of income tax rate should not exceed 30%.

Jin Dongsheng, deputy director of the Taxation Research Institute of the State Administration of Taxation, pointed out that low tax rates can reduce the tax evasion motivation of residents, which is conducive to raising the efficiency of Taxation and reducing the cost of taxation. This draft of personal tax also reflects this trend.

But Jin Dongsheng said that the source of income of high-income groups is more than non wage income. From the principle of fairness, we should levy more taxes on property income.