What Are the Social Security Tax Rates?

Social security tax refers to changing the social security fund from a "charge" to a "tax collection" form. The purpose is to cover social security and consolidate the cornerstone of China's social security system.

Social security tax

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Social security tax refers to changing the social security fund from a "charge" to a "tax collection" form. The purpose is to cover social security and consolidate the cornerstone of China's social security system.

What is social security tax? Today, people's livelihood is becoming a hot topic. Why does the government levy social security tax? What does social security tax mean for ordinary people?

As a new tax formally introduced by the government for the first time, does the introduction of social security tax mean

Social security tax, a vocabulary that is a little strange to ordinary people, has been well received by the media in the past two days. On the first day of April, in the magazine Qiushi, an official publication of the Central Committee of the Communist Party of China, the Minister of Finance Xie Xuren published an article, and the phrase Research on the Levy of Social Security Tax suddenly appeared. This is the first official mention of social security tax, and its meaning is intriguing.

Wang Zhaocai: Social security now uses a fee system, which has many limitations and lacks compulsory levy. We emphasize universal social security. We require a wide range of levies, and everyone must participate. Through taxation, everyone is required to pay.

The lack of compulsoryness and standardization makes social insurance funds in the process of raising obstacles, arrears, non-payment and underpayment, and arbitrary reductions are common. Data from the National Council of Social Security Funds show that as of 2004, the empty account of China's social pension insurance personal accounts had reached 740 billion yuan, and it was expanding by more than 100 billion yuan each year. From the perspective of Liu Yi, a well-known expert in China's tax law, the change from paying social insurance to paying taxes can also save the cost of collection:

Liu Yan: When the tax bureau collected taxes, his system was very complete, and it could be completed without cost. However, if the social security bureau counted it, another group of people would be needed. Once again, the cost of establishing a new system requires specialized cadres.

According to Zhao Quanhou, director of the Financial Research Office of the Ministry of Finance's Institute of Finance, future social security taxes may be levied by the state tax. In addition, according to international practice, social security tax is a form of income tax, that is, based on personal income, a fixed tax rate coefficient is used to calculate the social security tax that everyone should pay, and it is collected and issued according to a uniform standard. No matter whether the taxpayer can collect, pay from north to south, north or south, that is to say, the problem of transfer and connection of social security will be solved. For example, taxpayers who come from Shenzhen and Gansu to Beijing can enjoy them directly in Beijing because taxes are paid to the central coffers and can be enjoyed anywhere in the country.

Liu Yan: At present, social security is a prison for painting. Different provinces are different. If it becomes a tax, he can automatically transfer between provinces, and the floating population can take away his social security expenses.

However, the development of China's regions is uneven, and there has always been a gap in the proportion of social security contributions. Collected and distributed in accordance with uniform standards, some pensioners in some developed regions may not have enough pensions after they actually spend them. Wang Chaocai emphasized that the goal of social security is to protect basic living needs, and suggested that it can be protected by commercial insurance:

Wang Zhaocai: After all, the wages and consumption in Shanghai and Guangzhou are high, and the level of social security enjoyed should be higher, but after we engage in social security tax, there is no way to solve this problem. We can supplement the insurance.

Many people are concerned about the general background of the introduction of social security tax levy, that is, China's new income distribution plan is being formulated, and more media believe that fair income distribution should be the meaning of social security tax levy. Wang Chaocai and Liu Ye also held firm attitudes to this. The dynasty thought that if the social security tax was included in the national tax, the state could make overall arrangements:

Wang Zhaocai: If we follow the social security tax, it will help reduce regional differences. If it is a national tax, we will consider it at the national level, which will be fair and help us adjust.

Liu Ye emphasized that China has no basic laws on social security, and the current model of social security fee collection is difficult to cover the entire population, which is not conducive to solving the income distribution gap. Compared with the legal procedures, taxation is more stable, and the introduction of social security taxes can reliably guarantee the corresponding funding requirements.

Liu Ye: Once the tax is called, it is included in the tax law and levied by the tax authorities. Enforcement of law enforcement is increased, which is conducive to fair distribution. The first taxpayer has more people and the social security funds increase. The second one is returned through the formal channels once it is returned to the national treasury, which is better than the cost return and use.

Jia Kang, director of the Finance Division of the Ministry of Finance, is optimistic that from the current social insurance premium to social security tax, although there are differences in various regions across the country, on the whole, there are no hard obstacles. Liu Ye disagreed with this view:

Liu Yan: The difficulty is not all technical, there are actually other difficulties. He will encounter blockades between departments. The return to the local treasury directly becomes a tax, which is equivalent to the reduction of local mobile financial resources or its available financial resources.

However, when it comes to the timetable for social security tax levy, Liu Ye analyzed from the current official actions that there are still possible levies during the year. However, most experts from the Ministry of Finance and Taxation Institute believe that the possibility of levy will be greater during the 12th Five-Year Plan period.

Levy of social security tax to regulate income may not be effective

The Minister of Finance Xie Xuren wrote that it was necessary to study the levy of social security taxes, which caused a great response from the public. More than 70% of netizens on a website voted against the levy of social security taxes, believing that it would increase the burden on the public. Whether people want a social security fee or a social security tax differs in public opinion. The reason in favour is that taxation means can be used to narrow the income distribution gap. The argument against social security taxes is fear of increasing the burden.

Yang Weihua, a member of the China Taxation Institute and a professor at Sun Yat-sen University, pointed out that the introduction of social security taxes will cancel the current social security premiums, there will be no fees and taxes, and generally will not increase the burden on the public. However, given the failure of the previous medical reform, education reform, and housing reform, this term is difficult to convince the public.

First of all, if the existing fee is changed to tax, it should be a universal fee nationwide with a small standard difference. However, judging from the current situation, the collection of social security premiums across the country is very different. Not only has the unity of the provinces not been reached, but even some provinces and counties have not reached the same level. How can such reforms not increase the burden?

Secondly, from the point of view of social security tax collection, it is the use of taxation methods to solve the problem of income distribution gaps, and the compulsory, unpaid and fixed nature of taxation methods is bound to have a one-size-fits-all result.

Third, where is the purpose of collecting social security taxes? Are residents or farmers included, and do not include migrant workers? We know that money is of no nature, and once income enters the treasury, where it is used is no longer determined by its source.

Fourth, the contradiction between imposing new taxes and expanding domestic demand and promoting growth. I saw a new definition of "growth superstition" in the Oriental Morning Post yesterday, which made me think further. Economic growth failed to hide wealth from the people, but the government managed more funds. What was the effect? ? This is just like the PetroChina and Sinopec companies mentioned in the Dike bribery case today. In the eyes of Americans, state-owned enterprises are no different from the government.

We should all still remember the fuel tax reform. At that time, it was stated that the fee-to-tax reform should be solved, and the burden would not be increased because of the fee-to-tax reform, but the actual reform was to use more oil and pay more taxes. The author made a calculation based on his own experience. After the fuel tax reform, the burden increased by more than 200 yuan each year, which is calculated based on the regular annual mileage consumption. This should be regarded as an average level. In fact, due to the regulation of oil prices, the fuel tax reform has made consumers pay higher levels of expenses.

Therefore, to levy a social security tax, we must clarify the essence of the reform, distinguish between the purpose and the means, and we should not confuse the eyes and confuse the audiovisual, and do bad things with good intentions. It will be difficult to go back then.