That's a really nice question.What is that value added, from whom, and why? Any assumptions?
Trade War with China
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That's a really nice question.What is that value added, from whom, and why? Any assumptions?
manqiangrexue
Brigadier
That's exactly what I'm thinking every time you try to argue against the basic understanding that a wealthier Chinese society leads to a more resourceful Chinese government.
Instead, you talk about VAT taxes, how much taxes the rich pay, how much the poor pay, try to guess at numbers you don't have using ways you don't understand for an argument that is unsupported by any evidence and in the end, doesn't even matter. No one ever said that it would be good if the wealthy Chinese got wealthier compared to the poor Chinese; we said we want all of the Chinese to get wealthier compared to the rest of the world. "What is so hard to understand?" LOL
solarz
Brigadier
Umm... do YOU understand what the VAT is? It's a consumption tax, paid by manufacturers when they buy raw materials, by retailers when they buy from distributors, and by consumers when they buy from retailers. How do you imagine you can avoid paying VAT by writing it down as company spending??? LOL!
In the West, wealthy people have a plethora of ways to reduce their taxable income. Donald Trump used legal loopholes to avoid paying any income tax for years! Your idea that higher income tax means wealthy people pay more taxes is simply not grounded in reality! The brunt of income taxes are paid by middle class professionals.
FriedRiceNSpice
Captain
Yes exactly! Middle class should receive tax breaks, the government needs better ways to tax the grossly wealthy, and spend less on programs for the non-working lower classes!
Simple.
You have 1000 income, 200 from this is VAT.
Say you running an consultancy company, and there is no invoice to cover any expanse, or employed person .
At the end of each VAT period ( usually three month) you have to send this money (200 ) to the Revenue .
The leftover (800) is taxed as profit, and paid out to the owner , and he pay income tax after it.
If he has say 500 of invoice, with 100 VAT, then the payable money to Revenue will be 100, and the income tax will be decreased as well.
The interesting is after all of that the business profit will be 600, not 500, this is the magic of VAT : D
The point of the VAT is the business has to pay after the value it added to the purchased services/goods.
So, if there is an invoice that will decrease the amount of VAT payable by the business.
By the numbers in China they have way lower real tax rate than in the US.
So, the Chinese billionaires profit way more from the tax system/international trade than the US counterparts.
But yes, the average billionaire pay (as percentage) less tax than an average middle class person.
This can be done big part due to the international trade/financial flow, that makes it possible to hide income.
That is the reason why the wealthy doesn't support the trade war with China.( or with anyone)
USA. However there is only 4 percentage points difference
.
There is a close relationship between the capability of a government to do things ( shaping and using the resources of society) , the inflation and capability of taxation.
Simply, the taxation OR the inflation ( new money release) can be used to free up the resources in the society needed by the government.
Not really the money is the important, but the percentage of human capital that can be used government programs, like healthcare ,defence ect.
By this it become obvious if the country has high level of income concentration in a small group of politically connected people, who can avoid to pay tax then there is a big trouble for the given country . (Argentina , Japan )
So, if the government capability to tax the economical activity in the country is limited ( grey economy, bribes, high level of tax avoidance ) then the government has to use the inflation as funding source, but that makes the whole economical structure unstable (Venezuela).
So, if the wealthy pay less tax, but command big part of the resources in the economy then for the general population the advancement of the country is useless, there will be no more money to spend for healthcare/defence ect.
I wondered several times if the US purposefully used up the international trade/ treaties to create this kind of situation in several part of the world.
However I think they are not that clever, the current situation is more likely the result of of the activity by the wealthy / big corp. to avoid taxes and found new ways to grow.
manqiangrexue
Brigadier
Blah blah, oral diarrhea
This is your argument for China? Because the wealthy pay less tax (completely unproven by you), therefore there is no money in China for development of the military, healthcare, infrastructure, etc...? Are you serious? Even people like Gordon Chang aren't crazy enough to say that China isn't developing and hasn't developed. The speed of China's development in all areas alarms the world and scares the Western world! What you wrote is the stupidest garbage I have ever heard from anyone, on 2 separate points. 1. No one can deny that China is developing on all fronts. 2. In most countries in the world, the rich have ways to hide wealth, invest, reduce taxation, and they've all developed/progressed to different extents; the US developed into the current country today while the entire time, the rich have been partaking in all the activities you have mentioned to reduce their tax contributions. This sentence that you wrote is stupider than "the earth is flat" argument.
No, it is not that they are not that clever; it is that you are not that clever. When you think that all the thinkers of a superpower nation aren't that clever compared to you, you have a perception problem (AKA lost your mind). You probably think you're smart because you are looking at these details that no one else has mentioned but in reality, the person who misses the big picture, the person who doesn't see the forest because he is fixated on one tree, is the stupidest person of all.
solarz
Brigadier
What you describe is basically tax fraud, what does it have to do with writing off spending as company expenditure???
You can't decrease VAT by having more expenditure. You can, however, decrease taxable income by having more expenditure, which is exactly what many wealthy people do to avoid paying income tax.
Bullshit, China's corporate income tax rate is 25% while that of the US is roughly 24%.
So, you debate the connection between the corruption/tax avoidance ,and the capability of a country to reach its full potential compared to a better organised one?
The problem of China wasn't that everyone was poor , but that the Europeans become more wealthy, and more capable to do things.(like to defeat the Imperial Army )
"intelligence is a tool to reach a goal, but goals are not always chosen intelligently"
It is not necessarily fraud, everyone doing it when using the company laptop for personal purposes.
Say if the SOE managers using company purchased cars as they own, then that is exactly the above event that I described.
Interesting, how is it affect the fact the Chinese wealthy ( and practically everyone else) pay small amount of taxes?
And of course the SOEs will pay the taxes : )
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