What is a Death Tax?

The "death tax rate" was first proposed by well-known financial scholar Li Weiguang a few days ago. He bluntly criticized China for overtaxing. The 40% tax burden means death for Chinese enterprises, and it can also be called the "death tax rate".

Death rate

In December 2016, relevant media successively reported the issue of the "death tax rate". The relevant persons believed that "death tax rate-the real cause of the current economic downturn", "the tax rate is heavy and is close to the" death line "of enterprises", "China's long-term The consequence of heavy taxation is a decline in economic momentum and vitality. " To sum up, the core point is that excessive tax burden seriously affects the living space of enterprises, which is the main cause of downward pressure on the economy. ^[1]

Economic Observation Network

The "death tax rate" does not simply refer to taxes and fees. In fact, it includes all government-related and even extended costs. It is a warning to government behavior. Whether it is taxes, fees, five insurances and one fund, or land and even system costs, the government needs to reform its own work.

In fact, the government has already seen the problems of enterprises. The Central Economic Working Conference proposed that in terms of cost reduction, tax reduction, fee reduction, factor cost reduction, especially institutional transaction costs, reduction of approval links, reduction of various intermediary assessment costs, and reduction of enterprise use costs. Energy costs and reduce logistics costs. ^[2]

Sina Finance

According to the IMF statistical caliber, from 2012 to 2015, China's macro tax burden was close to 30%, which was far lower than the average level of developed countries 42.8% and also lower than the average level of developing countries 33.4%. According to the OECD calculation caliber, from 2012 to 2015, China s medium caliber macro tax burden (referring to the sum of tax revenue and social security contributions as a proportion of GDP) was 23.4%, while the average level of the OECD countries in 2014 was 35.5%; small caliber macro tax Negative refers to the proportion of tax revenue in GDP. From 2012 to 2015, China s macro tax burden was about 18.5%, and it has decreased year by year. According to IMF data, in 2013, it was 25.9% in developed countries and 20.4% in developing countries.

From the perspective of value-added tax, China's standard VAT rate is 17%, and there are low-level tax rates of 13%, 11%, and 6%. The average national VAT rate for implementing VAT is 15.7%, and the average VAT rate for EU countries is 21.6%. .

Through the above analysis, the so-called "death tax rate" is simply a false proposition, and China's tax burden environment is not as bad as some media renders. ^[3]

Xinhuanet

At a tax burden expert seminar held in Beijing on December 22, many finance and tax experts said that the tax disputes of enterprises should be viewed in a rational way, neither to "demonize" taxes or to ignore the cost concerns of enterprises behind the dispute. Intensified efforts should be made to ensure that substantial progress is made in reducing costs for the real economy next year. ^[4]