For eight consecutive years, Dong Mingzhu proposed to lower the individual income tax threshold at the two sessions, which caused a lot of applause every time.
However, I was not impressed by her proposal.
Many people must be wondering, am I not a free marketer? How can you not support tax cuts?
Here's why:What is a tax cut?
Let's take a look at Trump, who claims to cut taxes, as soon as he comes to power, he operates as fiercely as a tiger.
The tax cuts implemented by Trump after taking office are as follows:
Tax cuts and jobs act: Signed into law in December 2017. The bill significantly reduced the corporate tax rate from 35% to 21% and made adjustments to the personal income tax, reducing the tax burden for many taxpayers. In addition, the bill increases the standard deduction and makes changes to taxes such as real estate tax, inheritance tax, etc.
Personal Income Tax Relief and Adjustments: Trump** has taken a series of measures, including increasing standard deductions and adjusting tax brackets, to reduce the burden of personal income tax. These measures are designed to benefit more low- and middle-income groups and encourage economic growth.
Corporate tax breaks: Trump** reduced the corporate tax rate from 35% to 21% to improve the competitiveness of U.S. businesses and attract more investment and jobs.
Capital Gains Tax Adjustments: Trump** has also adjusted the rate and calculation of capital gains taxes to encourage capital investment and economic growth.
Isn't this operation awesome? Are you going to applaud him right away?
Wait, the operation is indeed as fierce as a tiger, but the result is to deceive two hundred and five.
Just look at the U.S. federal spending over a four-year term:
2017: 3$5 trillion.
2018: 36 trillion dollars.
2019: 4$1 trillion.
2020: 66 trillion dollars.
Is there a tax cut? If you really cut taxes, how can you spend money year by year?
The essence of taxation is ** expenditure.
Tax cuts without spending reductions are like cheating SB, this sentence is what an Austrian teacher commented on Trump a few years ago.
Did Trump cut taxes? Of course not, but just a politician who cheats voters.
The essence of taxation, let's see a little clearly:
You have to observe the tax situation of a society, you don't need to look at the tax rate, you only need to observe the expenditure of **.
Because modern ** is completely different from ancient **.
There are many ways to collect taxes in modern times, far beyond the imagination of ancient times.
Inflation is a tax; The national debt is also a tax; The social security system is also a tax, although they are not called taxes.
The reason why Trump has not cut taxes in substance, but is raising taxes, is because the U.S. federal government is constantly issuing Treasury bonds for spending. Here's how much U.S. federal ** has increased over the past four years.
2017: Approximately increased by 105 trillion dollars in national debt.
2018: Approximately increased by 1$27 trillion in national debt.
2019: Approximately increased by 1$42 trillion in national debt.
2020: Approximately increased by 208 trillion dollars in national debt.
One of the most important aspects of Milley's reforms in Argentina is to achieve fiscal balance, that is, not to borrow money to spend. This is the basic starting point for tax cuts.
If you really want to cut taxes, you have to do it
Taxes correspond to public expenditures, while public expenditures correspond to public affairs.
Ultimately, it determines whether tax spending rises or falls.
If you want to engage in industrial subsidies, public kindergartens, various welfare systems, and help local governments repay debts, and build various infrastructure, then more and more power will inevitably lead to an increase in expenditure.
An increase in spending is an increase in taxes, and it may not necessarily be an increase in the apparent tax rate.
But now we are facing a situation where all kinds of ** are constantly calling for ** to increase the power of affairs, such as this *** table, and some people are proposing free medical care.
These deputies who proposed all kinds of increased power never talked about where the money would come from.
China's current financial situation is very bad. From ** to the local level, it is a deficit**, that is, the expenditure is greater than the income.
However, the people are not satisfied, they think that they have not done enough, and they must continue to do it.
With so many demands for this constant push for power, where is the room for tax cuts?
At present, the most important reform for public spending in China should be how to ensure that the balance of payments is how to balance revenue.
In other words, we are facing a situation of constantly borrowing money to spend, and everyone knows the severity of local debts, and some small localities even borrow tens of billions or hundreds of billions of dollars at a time.
* Excessive spending, constantly using money to solve the so-called problem, is the real problem**.
Therefore, there is no room for tax cuts in China at the moment. Because the expenses are so huge, the power is so big, and there are so many things to manage, how can you cut taxes? Let's reduce our debts first.
Nominal tax rates have been lowered, but power has not been reduced, and what you can see is that public spending is soaring, and debt is rising, and it's not that there are fewer taxes, but that taxes are increasing.
After Milley came to power, he pursued fiscal balance, cut bus subsidies and fuel price subsidies, and did not reduce his powers, how could it be possible to achieve fiscal balance.
In the context of rising public spending and rising debt, the reduction of the personal tax threshold has no effect at all. Because, there is one of the biggest taxes.
The biggest taxes must be controlled
The biggest tax is inflation.
Dong Mingzhu's proposal has been well received because her proposal seems to be speaking for people with lower incomes.
Inflation, on the other hand, is a tax that targets the poor.
Let's assume that twenty years ago, there was a farmer who worked part-time and deposited 30% of his income in the bank every year, what is the result now?
As a result, in the dimension of the timeline, the money he saves every year is depreciating in a decreasing way, and the earlier he saves, the more he depreciates.
Although it is possible that he was not taxed, the actual depreciation of his savings in 20 years may have exceeded seventy or eighty percent, where did the depreciated money go? It is transferred away, and this is a tax.
If we don't control inflation, then China's poorest group of people, the group of people with the lowest incomes, who can only rely on saving wages to cope with their future lives, will be poor forever.
In inflation, who is the beneficiary, the first is**.
China's state-owned enterprises at all levels have a large amount of debt, and these debts will shrink when inflation. Twenty years ago, borrowing 10,000 yuan would make it difficult for ordinary people to repay it, because the monthly salary was only 1,000 yuan, and it might take several years to pay it off, but now it has become much easier.
Debt is diluted in inflation.
Also benefiting are many middle-class and boldly operating enterprises that boldly borrow money ** assets in the midst of inflation, as long as they borrow, they will earn.
Because they keep issuing money, the result is that their debts will become smaller and smaller.
And the group of people with the lowest incomes, such as migrant workers and ordinary people who can't afford to buy assets, will find that they can't afford to buy any assets even though they work hard.
For people earning less than 10,000 yuan, the most important thing is not the tax rate, but not to print money anymore.
Because as long as money is printed, the purchasing power of their deposits is transferred to the hands of those with debts, including **, state-owned enterprises, and all kinds of people with large loans.
Taxes that are much higher than personal income taxes are the ones that need to be reduced
What is the highest tax in the income structure of the average worker?
It's not personal tax, it's social security.
The current personal income tax threshold is 5,000 yuan, how much tax do you have to pay if you take 10,000 yuan a month? 290 pieces. This ratio, to be honest, is called low tax all over the world, accounting for only 29%。
But how much do you have to pay for social security?
Let me tell you: 3,450 yuan is a full 12 times the tax.
According to CCTV News: At present, the sum of China's "five insurances" is equivalent to 40% of the wage level, and the social security payment rate ranks first among 181 countries in the world, which is 46 times and 3 times that of the Nordic countries.
In addition, the total amount of social security expenditure is also increasing year by year, and the social security insurance rate is still increasing year by year.
Even though it is already the first in the world, it is still the first, which shows how much pressure China's social security expenditure is.
However, is it difficult to reduce social security expenditure? It's incredibly difficult.
When you see the ** caused by delayed retirement, you can understand that almost all of them are scolding, and no one wants to accept the reduction in social welfare spending.
Other expenditures may become temporary expenditures, and it is relatively easy to reduce them. Some projects can be stopped, for example, recently requiring places with a lot of debts to not start new projects, and even some public utilities can stop issuing funds, which can make them corporatized and become self-financing.
But how difficult it is to deal with this kind of systemic, time-spanning, and all-people-wide welfare plan.
As soon as young people enter society, they have to pay such a high percentage of their income, and this is the big problem that should really be paid attention to.
After a long time, young people are prone to various emotions, such as lying flat, not getting married, and facing a series of problems such as housing prices.
Because the taxes are too heavy. It can be said that the lower the income, the more painful the social security expenditure is for them. There is a big difference between the income and expenditure of 10,000 yuan and the income and expenditure of 50,000 yuan and 6 or 7,000 yuan.
So what is the right way to cut taxes?
What is the right tax cut?
As mentioned earlier, it is to reduce public spending, reduce power, and let ** be less in charge.
If you require food safety, or even more and more stringent food safety, the market supervision department needs to recruit a large number of people.
In Dongguan kindergartens, such equipment is even installed in the kitchen, as long as there are non-specific people entering (including the boss), then the automatic alarm will be notified to the market supervision department to prevent major food safety accidents.
If you manage it so finely, you need an IT system, you need someone to supervise it, it's all money.
Some people like to say that the country has money.
They say that 100 million yuan of free medical care is enough, so let's do it boldly. In 2023, the total health insurance expenditure of Chinese residents will be 3.2 trillion yuan, if it is free, it is certain that it will be doubled, it will be free, and you are still afraid of going to the hospital?
These trillions will become a tax fee of several thousand yuan per person every year, and a family will have to increase by several thousand, can the people afford it?
All those who advocate free want others to bear the cost, and they don't want to pay for it.
And more importantly, does the state have money?
But as long as you look at the expenditure tables at all levels, you will find that the money collected every year is not enough to spend. If it were a family, would you consider such a home to be a rich one?Every year, I eat it all up, and I borrow money to spend it.
If you take a look at the South American countries, how many countries have changed from developed countries to poor countries because of excessive spending.
The most important thing in tax reduction is not an order to reduce taxes, but a reduction in the power of affairs.
You don't have to worry about so many things, then there will be less spending and fewer people.
But what we see in various societies is that these people are calling for tax cuts on the one hand, and on the other hand, they are advocating for increasing welfare and increasing all kinds of regulation
Raising the threshold is not a good idea.
Implicit in raising the threshold is an assertion.
That is: the rich should pay more, and the poor should pay less.
If public spending benefits everyone, why shouldn't everyone pay it?For example, every family has received the education fund, and the nine-year compulsory system is compulsory.
Why do some people have to pay taxes to pay for their education, while others don't?
Why do people with higher incomes have to pay for the education of people with lower incomes?
If everyone in a city uses public roads, shouldn't it be the same regardless of whether they are rich or poor? If you want to distinguish , then the driver should pay more because he occupies more area of the road.
Shouldn't taxation, which is closer to market principles, be the concept of user pays?
Whoever enjoys the compulsory education provided by ** should pay the fee. Imagine if everyone is a family, then ask the rich people in your family to pay for the education of their children for those who have no money, can you open this mouth?
So this proposal, which implies more taxes on the rich, is, in essence, a kind of misinformation, which leads to an even more terrible tax model, that is, the poor should be subsidized, and the rich should pay more taxes.
Such a model is widely implemented in Western countries, and it has brought about a gradual impoverishment of capital.
Any proposal put forward by a representative should be a systematic plan.
If you ask for free medical care, you have to talk about where the money comes from?
If the tax reduction plan is not included, the result of such a proposal is that low-income people will reduce taxes and the other part of the population will increase taxes.
This becomes a tax increase package.
It will be meaningless, do you think that cutting taxes on the poor and raising taxes on the rich will necessarily benefit the poor? Of course not. As a result, there is a reduction in capital, which is ultimately bad for everyone.
If you cut spending at the same time and lower the tax rate for all people (not some people), I think this is the right suggestion for tax cuts.
Money, which is only spent from private individuals, is the most efficient. The more taxes there are, the more distorted the market becomes, misallocating resources to inefficient areas.
In my opinion, Dong Mingzhu's suggestion is just a means to get ** applause. She loved it so much.
If you really want to participate in public policy, without basic economic knowledge, you can only talk nonsense, and become a thing that attracts attention, and the individual is evaluated by a conscientious society, but it does not bring any progress to this society.