Individual Tax Is Reduced To A "Payroll Tax", And Tax On High-Income Earners Should Be Strengthened.

In May 10th, the spring of economic Blue Book: the analysis of China's economic prospects for 2016 was jointly held in Beijing by the Ministry of economics and the Social Sciences Literature Publishing House of the Chinese Academy of social sciences.

The blue book points out that China's personal income tax system has a large collection of wages and salaries, while the collection of capital and property gains is insufficient, thus making the proportion of the tax earned from work income to personal income tax increasing.

"The proportion of workable income tax was 43% in 2000 and 65% in 2014, a record high."

The blue book says.

The blue book pointed out that the direction of individual tax reform is clear, but under the constraints of practical conditions, these reform measures are difficult to carry out in the short term, for example, the establishment of a comprehensive and classified personal income tax system. First, we need to promote an open, pparent, fair and reasonable income distribution order, regulate hidden income, and ban it.

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Judging from the actual collection and management, because of the above difficulties, the wage and income tax is the most easily controlled and the cost of withholding and paying is high.

As a result, individual tax is gradually reduced to a "payroll tax".

The blue book says that fairness should be addressed.

The specific location of the function is to impose a higher tax rate on the high income portion of taxpayers and lower taxes on the lower income portion.

However, the current ability to levy supervision is limited, resulting in serious tax evasion for high-income earners.

This problem has not changed much.

"The goal of the personal tax system should be to pay more taxes to the high income earners. However, from the perspective of the system design of the current personal tax in China, it is the high salary people who pay more taxes rather than the high income people who pay more taxes."

The blue book says.

"Because wages and salaries are subject to excessive progressive tax rates and their maximum margins.

The highest tax rate is also the highest.

China's individual tax regulation confuses high - pay and high - income people. "

The blue book points out that in fact, most of the high-income earners in China do not earn income in the form of remuneration. For example, private owners can only pay a nominal salary or even pay no remuneration.

The design of wage income tax system is invalid for this group of people.

Especially in the years when the stock and real estate markets are unusually hot, the high salaries and the high income people are more and more deviated, which makes the function of individual tax adjusting the income distribution greatly reduced.

The blue book says that the establishment of a comprehensive and classified personal income tax system, and from the perspective of family burden, to increase the tax exemption for heavier burdened taxpayers is the reform direction of personal tax.

However, the blue book pointed out that in reality, the tax reform is more difficult, and the reform measures can only be gradual.

To establish a comprehensive and classified personal income tax system, we first need to promote an open, pparent, fair and reasonable income distribution order, regulate hidden income and ban illegal income.

At the same time, it is necessary to establish a tax exemption system that is linked to family burden. It is necessary for the tax department to clearly grasp the property of every family. This is obviously not in the short term.

"In the short term of the reform of personal income tax, it is difficult to get in place in the short term. It is also a way to improve the fairness of this system by raising the starting point for the increase of wages and salaries. Therefore, the priority of the tax reform is to solve the fairness of the tax system."

The blue book suggests that the classification levy should be implemented as soon as possible. On this basis, the starting point of remuneration for labor services will be raised substantially, so as to reduce the burden of most ordinary workers and implement the policy of "letting fish grow in water."