How to Solve the Problem of “A Rich Government with Poor People”

• Author: Sheng Bai

Recently, the Ministry of Finance released data showinf that public finance revenue may break the 1 trillion marks. Meanwhile the CPI is still moving at a high rate, in August the consumer price index rose 6.2%, while regular citizens were struggling from numerous financial pressures, such as those from inflation.

Some internet users calculated a bill: on a monthly income of 10,000 RMB, 14% is paid in tax, 12% in accumulation fund, 8% old-age insurance, 4% medical and unemployment insurance, with remaining totals 6,200 RMB; if the whole 6200 RMB is spent on consumption, one would have to pay roughly 17% of 2,900 RMB in VAT, and 28% on various other taxes. Those who earn 10,000 RMB per month will pay out the equivalent of 6,600 RMB for taxes. Furthermore, we have no right to ask how these taxes have been spent as a taxpayer; none of them is open for the public to know.

The revenue growth rate of public finance has exceeded GDP increase over many years, and taxation accounts for more than 90% of public finance revenue. Aside from finance revenues being made public, the government has significant revenue from fines and fees that lacks transparency. Nobody knows how the government handles this revenue and it is always a mystery to the public, because it has no connection with public services provided by government. From the fact that the government purchased iPad 2s as flash drivers and the national tax authority conducted tax collections by driving a luxury yacht, the public can realize that they have to suffer from the Tax Misery Index

Disputes arising from lower or higher taxation rates represent public discontent of public on the phenomenon of “a rich government with poor people.”A1 trillion financial revenue represents a rich government that, to some extent, can show off with plenty of money to loan to other countries, but, how...