Article/Jia Kang, columnist of Sina Financial Opinion Leader (WeChat official account kopleader)
If the current tax system remains unchanged and the individual income tax threshold is only raised to 10000 yuan, without considering the "five insurances and one fund", it can be calculated that the tax reduction range for taxpayers with a monthly income of less than 10000 yuan is 0.1 yuan to 745 yuan. Taxpayers with a monthly income of 100000 yuan will be reduced by 2925 yuan, and 2180 yuan more than the former. This is obviously against the original intention of individual income tax adjustment.
The "threshold" of individual income tax, as people often say, is actually the "standard for basic deduction of expenses", which means the tax base standard made after considering the basic living needs of taxpayers. The heated discussion about the threshold in real life is easy to give people an illusion. It seems that raising the threshold has solved all the problems of China's personal income tax reform, at least the most critical problem. In fact, this is a misunderstanding.
The institutional arrangement of individual income tax is composed of a series of relevant system elements and parameters, involving the selection of tax system mode, tax rate design, preferential terms closely related to tax burden, etc. The reform of individual income tax in China is oriented to gradually establish the combination of integration and classification, so when considering the reform plan of individual income tax, we must not only look at how to adjust the threshold, but must take systematic thinking, comprehensively consider all elements and parameters in the design of the entire tax system, and seek solutions that are both in line with the reform direction and operable in real life. From this point of view, the individual income tax threshold cannot represent the whole of the individual income tax reform, nor can it be called the most critical parameter. Of course, this is an important parameter that must be included in the overall optimization design scheme and actively respond to the demands of the people.
Specifically, if the current tax system remains unchanged and the individual income tax threshold is only raised to 10000 yuan, without considering the "five insurances and one fund", it can be calculated that the tax reduction range for taxpayers with a monthly income of less than 10000 yuan is 0.1 yuan to 745 yuan. Taxpayers with a monthly income of 100000 yuan will be reduced by 2925 yuan, and the latter will be reduced by 2180 yuan more than the former. This is obviously against the original intention of individual income tax adjustment.
The last round of increase of the individual income tax threshold to 3500 yuan in China was in combination with the adjustment of the progressive tax rate of excess. Without considering the assumption of "five insurances and one fund", the impact on the individual income tax burden of social members was that people below the original threshold of 2000 yuan did not benefit because their original tax payable was zero; The people with a monthly income of 2000 yuan to 19000 yuan are the beneficiaries of the decline in the amount of tax payable, of which the people with a monthly income of 7500 yuan to 12000 yuan received a maximum tax reduction of 350 yuan; The taxable income of people with a monthly income of more than 19000 yuan increased. Although the last round of revision of the Individual Income Tax Law failed to take the step of combining synthesis with classification, the systematic thinking was adhered to in the part of wage income, which achieved the result of "reducing the tax burden at the end and increasing the tax burden at the end".
Simply raising the threshold too high will also bring about a problem that cannot be ignored, which will significantly reduce the number of people who pay individual income tax in China, and violate the internal requirements of the modernization of national governance. At the beginning of the implementation of the last round of individual income tax amendment, with the increase of threshold, the number of social members covered by individual income tax regulation in China was only more than 24 million, just slightly higher than 2% of the total population of the country. This effect of marginalization of individual income tax should be prevented, which is also an important reason why the threshold of individual income tax should not be raised too high at one time.
Source: Economic Daily
(The author of this article introduces: member of the National Committee of the Chinese People's Political Consultative Conference and researcher of the Chinese Academy of Financial Sciences.)
