I'm back in 1990

Chapter 101: Some Ideas on Tax Reform

After New Year's Day, Huang Xiaochuan's life became extremely regular, and he also developed a new hobby: reading newspapers, especially state-run newspapers such as Renren Daily and Jiefang Daily.

Every day without fail, I go to the newsstand outside the school to buy all these newspapers. Since the end of last year, there have been many commentary articles in the newspapers.

There is debate about whether it is socialist or capitalist, and there is also the central government's desire to carry out tax reform.

Huang Xiaochuan read a commentary that said the existing national tax system was becoming outdated with the progress of the times, and called for reform of the existing tax policy.

However, it made no mention of why the timing was inappropriate or what ideas it had for new tax reforms. It was as if it simply raised a question without offering a solution.

After reading this commentator's article, Huang Xiaochuan couldn't help but have an idea. This was clearly a prelude to tax reform, and the debate between supporters and opponents would become increasingly intense, eventually leading to the implementation of the tax-sharing system in 94.

Huang Xiaochuan hadn't systematically studied economics in his previous life and had no concept of the pros and cons of the tax-sharing system. So he plunged into the library to search for information, hoping to understand the origins of the tax-sharing system, its advantages and disadvantages, and write an article to address these issues. Since he was studying economics, he had to make something of it.

So the other five people in dormitory 222 suddenly discovered that Huang Xiaochuan, who rarely went to the library, actually went to the library every day. Moreover, apart from attending classes, he spent most of his day in the library until it closed at nine o'clock in the evening.

It's like the sun has risen in the west! When asked what he was doing, Huang Xiaochuan answered that he was studying, and there was nothing wrong with that answer; he was indeed studying.

I constantly consulted materials and took notes, burying myself in piles of books, and even at night I would bring books and materials to my dormitory to study diligently.

Only after consulting historical materials did Huang Xiaochuan understand the origins of the tax-sharing system.

Its history can be traced back to the Zhou Dynasty, when the relationship between the royal family and the feudal lords was somewhat similar to the Western tax-sharing system.

The modern tax-sharing system, in its practical sense, can only be traced back to the late Qing Dynasty's constitutional reforms and the early days of the Beiyang government, and was not established until after the founding of the Republic of China.

Through various books and materials, Huang Xiaochuan learned that the concept of the tax-sharing system is a system that establishes the relationship of financial resource allocation among governments at all levels by dividing tax types and tax administration authority.

With the fall of the late Qing Dynasty and the establishment of the Republic of China, the Western modern tax-sharing system was introduced to China.

In 1911, the draft of the national tax and local tax was promulgated, which officially implemented the tax-sharing system in my country.

Following the establishment of the new nation, in the early stages of its founding, my country implemented a highly centralized fiscal system based on the domestic situation at the time.

The system was established based on Soviet Russian economic theory and initially functioned very well.

But

Why are newspapers and media outlets discussing tax reform lately? This indicates that the existing tax system is outdated, and the government needs a new fiscal and tax system to replace it.

After all, everyone is used to the old way, and now that we are suddenly told to change it, there will definitely be people who are unwilling to change.

Who is unhappy about it?

That is, local governments in various places, because the fiscal system modeled after the Soviet Union has been reformed and the decentralization of power among local governments has become stronger.

At this time, a strange phenomenon emerged in China: it was strong externally but weak internally, with strong branches but a weak trunk.

This phenomenon is certainly not conducive to long-term development, nor is it conducive to the country's reform and opening-up plan, so the idea of ​​reforming the tax system came about.

Huang Xiaochuan has always been the kind of person who does whatever comes to mind, so he started researching the tax-sharing system.

As his understanding of the tax-sharing system deepened, he began to write.

He cited some domestic and foreign tax models to correspond with the current tax policy in China. First, he suggested that the central government's macroeconomic control capabilities should be improved.

On this basis, a reasonable fiscal and tax allocation mechanism should be established, and tax-sharing reform should be carried out to readjust national tax revenue, while minimizing the impact on local interests.

First, there's the issue of proportions. Huang Xiaochuan couldn't determine this, so he only mentioned it in the article and suggested conducting investigations and analysis before making a decision.

The second issue is how to divide national and local taxes. "1990 I'm Back": It received rave reviews and overwhelming praise! Based on the information he had researched and combined with some tax types he knew from his previous life, Huang Xiaochuan put forward a suggestion for the division.

The income tax of central state-owned enterprises, customs duties, consumption tax and value-added tax collected by customs, income tax and consumption tax of railway departments, and income and profits centrally turned over by the head offices of major banks and insurance companies will be collected as national taxes.

Business tax, profits turned over by local state-owned enterprises, personal income tax, urban construction tax, property tax, vehicle and vessel tax, stamp tax, slaughter tax, agricultural and animal husbandry tax, and income from the paid use of land are designated as local taxes and collected and managed by local governments.

Another item is the shared tax between the national tax bureau and the local tax bureau.

Following the model he knew from his previous life, Huang Xiaochuan suggested establishing two tax collection agencies to collect national and local taxes separately.

Currently, there is only one tax collection agency that is responsible for collecting both national and local taxes. This method of tax collection fails to clearly define the responsibilities of the state and local governments, cannot effectively guarantee the state's fiscal revenue, and also has a certain impact on the enthusiasm of local governments to collect taxes.

It took Huang Xiaochuan four days to complete the framework of the article. What he lacks now is some actual data, which he cannot obtain by himself and must find outside help.

He had already chosen the right person in his mind.

The first person Huang Xiaochuan contacted was Ding Yi.

"Old Ding, I need your help with something."

"Hey! You actually asked me for help? That's strange. Tell me about it?" Ding Yi found it odd that Huang Xiaochuan had asked him for help.

"Could someone help me find out how much tax Shanghai collected in total last year and the year before, and how much profit and tax enterprises and institutions paid to the state?"

Upon hearing this, Ding Yi's pupils contracted: "Why are you asking about this?"

Huang Xiaochuan brought several newspapers to Ding Yi and pointed to several reports and commentary articles: "Take a look for yourself, these are all mouthpiece newspapers."

Ding took the newspapers with a half-believing, half-doubting attitude and read them one by one. After reading for a while, he said indifferently, "Hey! It's just about tax reform. Let them reform. Anyway, the money is all in the pot. It's just a matter of whether it rots in the national pot or the local pot."

"You've been researching this all month? Are you bored out of your mind? You'd be better off researching stocks with me!" Ding Yi was eager to trade stocks on the stock exchange, but his investment in stamps hadn't been realized yet. He had recently tried to liquidate his stamps and collectibles to buy stocks, believing they would definitely rise, but Huang Xiaochuan rejected his idea.

Huang Xiaochuan advised him to wait until after the New Year to make this plan, and that stock prices are not always rising and have also fallen sharply, so there is no need to rush.

However, Huang Xiaochuan didn't want to discuss this with Ding Yi today, so he asked him, "Just tell me if you can help?"

Ding realized that Huang Xiaochuan wanted to conduct a survey, and since he could indeed help with this, he agreed.

"I'll need to ask an elder in your family for you, but I can't guarantee anything!"

Upon hearing this, Huang Xiaochuan thought, "Alright, I'll agree. I'm not in a hurry anyway. Slow and steady wins the race!"

Then he set his sights on Wu Duo.

"Squad leader, I need your help."

Seeing that Huang Xiaochuan had taken the initiative to ask him for help, Wu Duo asked with interest, "Hey, it's rare for you to ask for help, what's going on?"

"The class monitor isn't joking with you, I really need your help."

"I definitely won't help others if they ask me for a favor, but I'll definitely help you out. So, what is it?"

"Class monitor, after you go home for winter break, could you do me a favor and help me look up some data at the National Archives? Here are the approximate names of the data I need." Huang Xiaochuan said, handing Wu Duo a piece of paper.

Wu Duo took it, glanced at it, and read aloud: "The total national profit and tax revenue for last year and the year before, and the total profit and tax revenue remitted by local governments to the central government."

"Damn it, man, what are you doing?"

"Class monitor, I've been researching our country's tax system lately and have some insights that I'd like to write an article about. I need some data."

Wu Duo's eyes lit up when he heard this, and he started negotiating with Huang Xiaochuan: "I'll help you with this, but you have to let me see your article later."

"That's it? Articles are meant to be read, so feel free to read them when the time comes."