Is China Copying US Tax Codes – Is This Wise?
In the United States we have a very interesting income tax law theory. We believe that the more money someone makes, the less they actually need for themselves, thus, the more they should pay as a percentage of their income to the federal government, which then goes about re-distributing it all. This is absolutely the wrong way to play it, because the more you make the less you should pay, just as if you buy more items in the store of a certain type there is a quantity discount.
Further, it should be noted that those who make a large amount of money in their personal income generally require fewer social services, and they normally would not get food stamps, or require free medical care from the government, because they can pay for themselves. What we should be doing is charging people less money as a percentage of their income the more money they make, because they are requiring fewer services from the government.
People who make less money should be charged a higher percentage of their income because they are generally the people who soak up the most services and incur the most cost for our government. Somewhere along the line socialism crept into our nation’s tax codes and theory, which is problematic because in this great nation we believe in self-reliance and capitalism. The further the United States slips into this problematic theory of taxation, the less abundance, and productivity we will have.
Of course, not to be outdone China is copying our taxation system, and they are copying a mistake which is going to hurt their productivity immensely in the future. In fact there was an interesting article in the Wall Street Journal recently titled “China Plans Tax Change to Address Inequality” by Aaron Back which stated; “China plans to cut taxes for people with lower incomes when can you file taxes and raise them somewhat for the rich under new legislation expected to pass shortly, one effort to address a widening income gap thought to threaten the country’s social stability.”
China is planning to consider raising the taxes for those who make over $500 per month, whereas right now it is at $300 per month, which is almost twice the minimum allowable wage. China thus, plans to tax the rich or wealthy and re-distribute wealth. Just as our nation in the USA taxes wealthy folks at a higher rate than those who don’t make a lot of money, but actually soak up more government services.
As I have explained this to people in the past, folks just shake their heads and believe that people who are rich should pay higher percentage of their income to taxes. This is really unfortunate thinking, because we are penalizing those who produce. And therefore we will get fewer producers, and less productivity, therefore less abundance in our entire society and civilization, and thus, there will be less money left over from those unfortunate few who cannot produce.
In other words, our taxation strategies and theories are causing the very opposite of their intent. Indeed I hope you will please consider all this and think on it. As you probably guessed I am not a socialist thinker, I am a capitalist who believes in strength, honor, integrity, hard work, ethics, honesty, and capitalism. If you’d like to discuss this with me I think it is fair that you know where I’m coming from, before you shoot me an e-mail and tell me about your opinions. Nevertheless I am interested in what you have to say.