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People's Daily Online>>Opinion

Chinese mainland's tax burden exaggerated

(People's Daily Overseas Edition)

17:02, September 02, 2011

Edited and Translated by People's Daily Online

The Chinese mainland has ranked second again on the "Tax Misery and Reform Index," which was recently released by Forbes Magazine. China ranked second for the first time in 2009. Tax problems such as the “tax levied on the allocation of moon cakes by employers to employees as corporate benefits" have caused public discussions on China's tax system.

"Although China has been ranked among several countries with the world's highest level of tax burden, the level of China's tax burden is virtually much lower and has obviously been exaggerated," said Yang Tao, vice director of the Monetary Theory and Policy Office of the Institute of Finance and Banking under the Chinese Academy of Social Sciences. He added, "China's current tax rates are not very high."

Yang said that Forbes's "Misery and Reform Index" has obviously involved subjective judgment because it calculated the tax burden based on the stationary tax rates of various countries without taking into account the difference in the tax structure of various countries, which means it failed to accurately reflect each country's actual tax burden.

However, Sun Yudong, a professor from the School of Public Administration and Policy under the Renmin University of China, said that although the Tax Misery Index is not quite accurate, it still has some value for use as a reference in China's taxation reform.

He believes that, viewing it longitudinally, China's macro-tax burden is still relatively high mainly because the maximum marginal tax rates of China's main tax items are relatively high, and China’s statutory tax rates are also not low compared to developed countries' corresponding tax items.

For example, the maximum marginal tax rate of China's individual income tax is 45 percent, but it is 40 percent in the United Kingdom., 37 percent in Japan, 35 percent in the United States and 13 percent in Russia. In addition to main tax items, China also collects the consumption tax and other local taxes, making China's macro-tax burden seemingly relatively very high.

According to Yang, citizens of China feel the tax burden is heavy because they are also affected by government revenue taxes in addition to the individual tax and enterprise income tax. For example, government revenue taxes, such as the land-transferal fees and capital income of state-owned enterprises, are all quite high. Meanwhile, the financial expenditures that are invested in social security facilities, such as the social welfare and public service are still not sufficient, leading to the misunderstanding of China's tax burden.

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PGZiicrvySkE at 2012-02-07148.243.223.*
You would think that with all that wninihg about the high cost of living in Hawaii, that they would use the Federal standard deduction of $5,150 and personal exemption of $3,300 to exempt Hawaii taxpayers at the lowest end ($8,450) from even having to mess with tax returns and paying taxes.Instead, they use a mind-boggling $1,500 standard deduction and personal exemption of $1,040, for a total of only $2,540 before one has to start paying taxes so the state employees can live in the luxury they"ve grown accustomed to.That"s why I"d rather comment about your blog than taxes in Hawaii; I like to have a logical discussion that makes sense.
CbthEyPMBMzibGOrEGv at 2011-10-04109.230.217.*
Shoot, so that's that one supopess.
  

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