Chinese Economics Thread

[BlackWindMnt]

A property tax will reduce the pressure to sell land for funding at the local government level. And it will help to restrain the property bubble.

On the other hand capital gains tax and inheritance tax takes away the resources that otherwise entrepreneurs and companies could use to re-invest into their businesses.

America has both capital gains and inheritance taxes and it has done nothing to reduce the wealth gap. It has only taken away the resources that otherwise could have been used for productive investments.

A warning sign for China is what is happening in California what once was the wealthiest state in America is now a mess.

If they implement all these measure's or just some of these measure's will just lead companies to leave China in greater numbers for lower cost countries.

But as a outside viewer it mostly seems like US taxes the middle class so the 1% can profit and pay less taxes.
That wealth is then used to increase the FIRE aspect of their economy, seems like again as a outside viewer that China taxes the 1% and the middle class to actually give back to society in the form of infrastructure and jobs.

But then again this view might be a bit to rosy colored.

 

[Overbom]

Why would it be risky?

Inheritance tax wouldn't affect the quality of life of seniors. An inheritance also means you're wealthy. Most people in China will not be affected much by this.

People generally dont like taxes. And especially parents often (always?) work to provide wealth for their next generation.

Now if the Gov suddenly comes and start saying, "you know what? We will take a fat (could be more) %20 of your wealth if you want to give it to your (e.g) son", that would definetely alienate the old people.

Ofc there are many ways for the Gov to implement it while not losing much support from the people. They can direct it to the wealthy, or have a high threshold ($1.000.000 or $500.000) before taxing them.

By the way I have not seen any proposal so far saying that there will be threshold in China, so for now, this proposal would apply to everyone which obviously is impossible to happen politically

 

[hkbc]

For property taxes it is also difficult as property serves as an investment vehicle for the Chinese people.

It has nothing to do with 'investment' one of the tenets of the CPC is that everyone gets a roof over their head, it would be regressive to then tax that as some kind of benefit!

End of the day for China at present its about re-distribution of wealth not taxing wealth for the sake of it, the pie needs to grow but everyone needs a slice of it, therefore a balance needs to be struck between iron rice bowl and the wild wild west.

In modern China its all about ends not means (black cat white cat etc) so the types of tax does not need to be based on how its wrapped up and presented so that its digestible to voters, rather there's an acknowledgement that the people need to finance the state so those with more need to do more, obviously there are those in society that won't wholeheartedly agree with that but there isn't the ideological anglo saxon 'big government' 'no government' divide that with election cycles paralyses society.

 

[BlackWindMnt]

People generally dont like taxes. And especially parents often (always?) work to provide wealth for their next generation.

Now if the Gov suddenly comes and start saying, "you know what? We will take a fat (could be more) %20 of your wealth if you want to give it to your (e.g) son", that would definetely alienate the old people.

Ofc there are many ways for the Gov to implement it while not losing much support from the people. They can direct it to the wealthy, or have a high threshold ($1.000.000 or $500.000) before taxing them.

By the way I have not seen any proposal so far saying that there will be threshold in China, so for now, this proposal would apply to everyone which obviously is impossible to happen politically

It could be a progressive taxation, where the 99% would be taxed lightly but the 1% would be taxed more heavily.

 

[solarz]

People generally dont like taxes. And especially parents often (always?) work to provide wealth for their next generation.

Now if the Gov suddenly comes and start saying, "you know what? We will take a fat (could be more) %20 of your wealth if you want to give it to your (e.g) son", that would definetely alienate the old people.

Ofc there are many ways for the Gov to implement it while not losing much support from the people. They can direct it to the wealthy, or have a high threshold ($1.000.000 or $500.000) before taxing them.

By the way I have not seen any proposal so far saying that there will be threshold in China, so for now, this proposal would apply to everyone which obviously is impossible to happen politically

Chinese people are not as obsessive about taxes as Americans.

People are not going to care much about new taxes as long as their economic situation continues to improve.

 

[Overbom]

It could be a progressive taxation, where the 99% would be taxed lightly but the 1% would be taxed more heavily.

Yes, this is certainly possible.

For example, in the West govs have gotten people's support for inheritance taxes by setting up high thresholds, or setting up some clearly "unintentional" loopholes which benefit the rich and screw the poor by deploying their media propaganda to mislead the people

So rich people with good lawyers and accountants are dodging the tax, while the common and poor people hold their noses and honestly pay the taxes. Obviously a very convenient system for the West.

I doubt that China would adopt such a corrupt system, so most likely it will be like you said. Tax the rich and leave the poor people alone. At most, I could see some small loopholes for the rich so that China doesn't alienate them completely. However there is no chance that the loopholes will be as big as in the US or UK

 

[duskseeker]

I think you missed what I was pointing out about your examples of missed opportunities. You said the Anglo-Americans squandered tech advancements like "no moon bases, no interstellar drives, no antigravity, no anti cancer meds, nothing that stealing japan's tech would have entailed". Inventing interstellar drives and antigravity from stolen Japanese tech is so ridiculous, it looks like you said it sardonically on purpose. So, for you to claim the Anglo-Americans could have and should have done it while the rest of the world did NOTHING of the sort in the meantime makes it look like a sarcastic racist compliment of the Anglo-Americans and an insult to everybody else. You're feeding the beast, feeding racism. I'm just pointing it out because the type of tech advances you mentioned would catapult Humanity to a Kardashev Type II Civilization. This is thousands of years into our future, IF EVER. The Anglo-Americans have created a lot of scientific and tech advancements since the 1990s. They didn't make advances in interstellar drives or antigravity because they simply aren't capable of it. This is like asking rhesis monkeys to understand E=MC2. So, when you attribute this capability to relative rhesis monkeys, aka. Anglo-Americans, it makes all the other monkeys....everybody who is not an Anglo-American, look inferior by comparison.

I'm wiping coffee off my screen with the kardeshev Type II civilization comment. I didn't know anime tech was tangible back in the 90s

 

[AndrewS]

On the other hand capital gains tax and inheritance tax takes away the resources that otherwise entrepreneurs and companies could use to re-invest into their businesses.

This is factually incorrect.

1. An Inheritance tax doesn't take away any resources from entrepreneurs/companies.

The entrepreneur has already died AND it is the ownership of the company that transfers. The company itself still has the same resources.

2. Most capital gains are from property or financial assets, where assets are just being stored.

It's not from companies which are actively conducting a trade. And in any case, you can write a capital gains exemption for these sorts of companies, like we see in the UK

 

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[hkbc]

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Might have something to do with the switch to overland rail transportation, which is quicker and at the moment cheaper! But you do you!