China Income Tax: The Video
Posted by Dan on March 10, 2008 at 05:06 PM
CLB's own Steve Dickinson was on CCTV's Dialogue program the other day discussing China's income tax. Steve was on with Kevin Ng, Tax Managing Partner for Deloitte in China. To watch the video of the program, go here.
The show was ostensibly about China's having just raised its individual income tax threshold from 1600 yuan to 2000 yuan, but it ended up delving into "big policy" issues regarding fairness and equity. Since China's income tax collections rose 30% year on year from 2006 to 2007, such taxes are becoming increasingly relevant and this show was surprisingly interesting and engaging.
Check it out.
Comments
Dan/Steve:
I didn't realize you guys were media-savvy... haha! Give me a rousing topic to discuss, and I'll see if I can wrangle my Chinese masters into getting you on my program... if that's something you're at all interested in!
Posted by: Paul | March 9, 2008 11:25 PM
Wow, what's next? T-Shirts comemorating the event? At least (yuck) Yang Rui wasn't there.
At least it makes a difference from the usual CCTV spiel - usually a panel discussion between a member of the Japanese communist party, a journo from one of the PRC government's tame HK newspapers and the great Yang Rui himself. The only 'Dialogue' that happens is along the lines of:
Yang Rui: "Some people have described Chinese motherland reunifcation as inevitable, what do you think?"
Tame journo and communist from the land of the rising sun (in zombie-like chorus): "Yes, we agree"
As for the tax issue, Chinese tax payers see very little of their money - there's very little in the way of government support for education, health care, state pensions, unemployment support etc. Chinese themselves say this is due to the relative poverty of China, but the real reason is the relatively low level of central government spending - only 18.5% of GDP according to the heritage foundation (
http://www.heritage.org/Index/country.cfm?id=China ). This compares to 37% for the US and 44-45% for the UK. This is compounded by the high proportion of this that goes on the military - CIA figures put military spending at roughly 5% of GDP.
I am also suprised that they actually allowed the suggestion that government money was being wasted to be posited. Of course, this was moderated with the idea that people might get this idea because of a 'lack of information'. The word 'corruption' unsuprisingly remained unmentioned.
Posted by: FOARP | March 11, 2008 4:16 AM
Before taking a course in U.S. Income Taxation, I thought tax law is just about the numbers--income, deductions, credits, etc. However, while looking into some of the case law, I began to realize the policy reasons behind certain tax provisions. What struck me the most is the equity issues involved, both horizontal and vertical.
As Steve alluded to, taxation is not just a means to generate wealth for the State; it is also a social and institutional tool to induce certain behaviors.
It would be very interesting to know the rationale behind China's personal income tax code. And the discussion was a small window into that.
Tax law might be boring on the surface; but it is fascinating if you look beyond the "lined items."
Posted by: Brad Luo | March 11, 2008 5:58 AM