triplefruitdeluxemegaways| How to expand the adjustment effect of income redistribution? Experts discuss tax and social security expenditure reform

Experts suggest increasing social security expenditureTriplefruitdeluxemegawaysAnd tilt to the low-income groups, do the scale and proportion of large income tax, and give better play to the adjustment effect of income distribution.

Under the background that a new round of fiscal and tax reform is about to be launched, there has been a heated discussion on how to strengthen the regulation of taxation, social security, transfer payment and improve the accuracy of policies.

On May 11, the Institute of Finance and Taxation of Renmin University of China and the China Financial Policy Research Center held an online forum with the theme of promoting the reform of the fiscal and taxation system of income redistribution.

Yue Ximing, a professor at the School of Finance and Finance of Renmin University of China, said that at present, the adjustment effect of government transfer payments and personal income tax redistribution, including social security expenditure, is low, and social security investment should be increased in the future, and the increment should be mainly used for low-income people. In particular, we will raise the level of rural pensions, rather than pensions for retirees in administrative institutions. In addition, to increase the scale of personal income tax, including raising the average tax rate of personal income tax, maintaining the existing threshold of personal income tax, and so on.

Increase social security expenditure

Yue Ximing said at the forum that the government has two main means of income redistribution, namely personal income tax (hereinafter referred to as "individual tax") and social security expenditure, which is also part of government transfer payments. What we ignore is that more than 80% of the redistribution effect comes from social security expenditure, and the income distribution effect of personal income tax is very limited. This is mainly because the progressiveness of social security expenditure or transfer payment is much higher than that of personal income tax, that is, the tilt of social security expenditure to low-income people is much greater than that of personal income tax income to high-income people.

At present, an important indicator to measure the income distribution gap is the Gini coefficient, the Gini coefficient is between 0: 1, the larger the data, the greater the gap between the rich and the poor. The general Gini coefficient is 0Triplefruitdeluxemegaways.3Mel 0.4 is more reasonable, while 0.4 Mel 0.5 gap is too large, greater than 0.5 gap.

According to the data of the National Bureau of Statistics, China's Gini coefficient has declined after reaching a high of about 0.49 in 2008 and has remained at a level of about 0.47 in recent years.

After comparing the data of some countries and regions, Yue Ximing said that at present, the Gini coefficient published by the National Bureau of Statistics is about 0.4. if China enters a high-income country in the future (the Gini coefficient of high-income countries is generally less than 0.468), you need to reduce the Gini coefficient to less than 0.4. To achieve this goal, we mainly rely on government transfer payments, including social security expenditure, because personal income tax has a limited effect on income distribution.

According to the central budget for 2024 disclosed by the Ministry of Finance, the central government will transfer about 10.3 trillion yuan to local governments in 2023, and the figure is expected to be 10.2 trillion yuan in 2024. Among the transfer payments related to social security, the basic pension transfer payment in 2024 is about 1.1 trillion yuan, and the basic medical insurance subsidy for urban and rural residents is about 400 billion yuan.

Yue Ximing said that in the redistributive effect of both government transfer payments and individual taxes, scale is more important than progressiveness. From the historical data, it can be seen that only when the scale of transfer payments, including social security expenditure, continues to expand, can low-income people benefit more.

"from the perspective of income redistribution, the problem with China's social security system or social security expenditure is that the scale of social security funds is too low, at the same time, the limited funds are mainly concentrated in the pensions of a small number of administrative institutions and public officials, such as civil servants, because of excessive concentration and small scale, so the income redistribution effect of social security expenditure is very small. The reduction of the Gini coefficient is very small. " Yue Ximing said.

He suggested that increasing investment in social security should be mainly used for low-income people and rural people, as well as increasing unemployment insurance or childcare subsidies, which could narrow the income gap. As the pension of retirees in administrative institutions is relatively high, it is suggested that the pension of rural residents should be raised instead of increasing in the future.

Li Yongyou, a professor at the School of Finance and Taxation of Zhejiang University of Finance and Economics, said at the forum that in addition to increasing investment in social security, fiscal expenditure is also more critical to promote the income growth of low-income people, such as inclusive education and medical expenditure, so that low-income groups can enjoy better education and have the ability to earn money.

Li Linmu, dean of the School of Finance and Taxation of Guangdong University of Finance and Economics, said at the forum that while increasing social security and other expenditures, financial constraints should correspondingly reduce some investment expenditures for economic development.

The adjustment of personal income tax focuses on increasing the scale of income.

Although the role of personal tax in regulating income distribution is much weaker than that of government transfer payment, from the income side, it is the tax that can play the most important role in adjusting income distribution among the main taxes.

When comparing the income adjustment effect of personal tax in some countries and regions, Yue Ximing found that the redistribution effect of personal income tax in China is relatively low. This is mainly due to the low proportion of personal income tax revenue in China. After research, it is found that it is not feasible to greatly increase the scale of personal income tax and concentrate the increase on the high-income population.

He believes that based on the perspective of expanding the effect of income distribution, there are various ways to expand the scale of personal income tax in the future, among which the most feasible approach may be to maintain the existing threshold of personal income tax for a long time. If we want to give full play to the redistribution effect of personal tax income in the future, raising the average tax rate is the only way.

Li Linmu said that China's individual income tax system has reached or even far exceeded that of most developed countries, but in terms of the actual tax burden, the average tax rate of individual income tax is very low. On the other hand, the effect of personal tax on the adjustment of income gap is very weak, which is mainly due to the low average tax rate and income scale, although it is progressive, it does not play a corresponding role.

He suggested that the personal income tax reform should reduce the top tax rate by 45 per cent, such as 35 per cent or 30 per cent. At the same time, expand the tax base, for example, we can consider the housing provident fund, pension over a certain standard and so on into the scope of individual tax, so as to increase the actual average tax rate. In addition, it is necessary to strengthen tax collection and management to improve tax satisfaction.

Li Yongyou said at the forum that at present, when it comes to personal income regulation, habitual thinking is to emphasize progressiveness so that the rich can pay more taxes, but this does not mean that they can ultimately receive more taxes. Moreover, the rich pay more taxes and the poor have no direct relationship with increasing their income. It depends on fiscal expenditure policies, that is, whether it is used for social security expenditures and other places to improve people's livelihood and welfare. Therefore, in choosing income redistribution policies, tax policies should be used with caution, reduce policy distortions or negative incentives, focus on tax fairness, and expand the scale of income.