Glamor Economics

Chapter 132

Chapter 17 Section 5 The Relationship Between Ups and Downs National Economy and People's Livelihood——Tax Rate

The tax rate is the quantitative relationship or proportional relationship between the tax amount and the taxable object, and refers to the scale of taxation.Taxes are generally collected at a certain rate.Such as the meal tax in the United States: If you treat a guest with public funds, you have to pay 50% of the meal price, and pay the tax to the tax bureau within two hours after the meal. 50% is the tax rate.If the tax rate is set too high, it will undoubtedly damage the income of the people, thereby reducing the standard of living of the people.The effect of tax rate on economic development is very obvious.

After the 1973 oil crisis, the U.S. economy was hit by stagflation, and its development was sluggish.When Reagan came to power, the United States was facing an "economic Dunkirk retreat", with negative economic growth, double-digit inflation, high interest rates of 20%, the highest tax rate of 70%, and the unemployment rate once climbed to 11.3 %.After Reagan came to power, in order to revitalize the US economy, he launched a tax cut policy to stimulate investment and economic development by reducing the tax rate of enterprises.This trick really worked. It not only restored the economic growth of the United States, but also enhanced the confidence of the Americans.

Reagan was elected president in the early 20s and he left the White House in 80, a total of 1989 years.By the time he delivered his farewell address in 8, the American economy had entered a period of prosperity.Before Reagan left the White House, the top tax rate had dropped to 1989 percent, and the unemployment rate had dropped below 28 percent.

Only by rationally using the economic levers of taxation and tax rates can economic development be promoted and living standards improved.This should be of some enlightenment to tax rate setters.

my country's current tax rates can be roughly divided into the following three types:
1. Proportional tax rate: Proportional tax rate is implemented, and the same tax object is taxed in the same proportion regardless of the amount.The advantages of the proportional tax rate are: different taxpayers of the same taxable object have the same tax burden, which can encourage the advanced and spur the backward, which is conducive to fair competition; the calculation is simple, which is conducive to tax collection and management.However, the proportional tax rate cannot reflect the principle that those with greater ability will be levied more and those with less ability will be levied less.The proportional tax rate can be divided into the following types in terms of specific application:

Industry proportional tax rate: that is, different tax rates are stipulated according to different industries, and the same tax rate is adopted for the same industry;

Product proportional tax rate: that is, different tax rates are stipulated for different products, and the same tax rate is adopted for the same product;

Regional differential tax rate: that is, different tax rates are implemented for different regions;
Range-proportional tax rate: That is, the central government only stipulates a range of tax rates, and all localities can choose and determine a ratio within this range, according to the actual situation of the region, as the local applicable tax rate.

2. Fixed tax rate: fixed tax rate is a special form of tax rate.It is not based on the proportion of the taxable object, but stipulates the fixed tax amount according to the measurement unit of the taxable object, so it is also called the fixed tax amount, which is generally applicable to the tax type that is levied according to the amount.The advantage of the fixed tax rate is that it is levied on the basis of quantity rather than ad valorem, which is conducive to encouraging taxpayers to improve product quality and packaging, and is easy to calculate.However, since the regulation of the tax amount is divorced from the change of the price, when the price rises, the state fiscal revenue cannot increase simultaneously with the increase of the national income, and when the price falls, it will limit the enthusiasm of taxpayers for production and operation.In terms of specific applications, it can be divided into the following categories:

Regional differential tax amount: In order to take into account the differences in natural resources, production levels and profit levels in different regions, different tax amounts are formulated according to the different situations of economic development in each region;
Range tax amount: that is, the central government only stipulates a tax amount range, and each locality determines an implementation amount within the range specified by the central government according to the actual situation of the region;
Classified and graded tax amount: Divide taxable objects into several categories and levels, and stipulate corresponding tax amounts for each level from low to high. Higher levels have higher tax amounts, and lower levels have lower tax amounts, which has the nature of progressive taxation.

3. Progressive tax rate: Progressive tax rate refers to the division of several levels according to the size of the taxable object. Each level stipulates the corresponding tax rate from low to high. The larger the taxable object, the higher the tax rate, and the smaller the amount, the lower the tax rate.The progressive tax rate is divided into the following types due to different calculation methods and basis:
Full progressive tax rate: that is, the amount of the taxable object is calculated according to the tax rate of the corresponding level.When the tax object is increased to a level, the tax object amount is taxed at the higher tax rate;

Full-rate progressive tax rate: It has the same principle as the full-rate progressive tax rate, but the basis for tax rate progression is different.The basis of the full progressive tax rate is the amount of the taxable object, while the basis of the full rate progressive tax rate is a certain ratio of the taxable object, such as sales profit rate, capital profit rate, etc.;
Excessive progressive tax rate: that is, the taxable objects are divided into several grades according to the amount, and the corresponding tax rate is stipulated for each grade from low to high, and each grade is taxed according to the tax rate of that grade;

Excess progressive tax rate: It has the same principle as the excess progressive tax rate, except that the basis for the progressive tax rate is not the amount of the taxable object but a certain ratio of the taxable object.

Among the different forms of tax rates above, the advantages of full progressive tax rate and full rate progressive tax rate are that they are easy to calculate, but the tax burden is unreasonable at the critical point of the two levels.The calculation of the excess progressive tax rate and the excess progressive tax rate is more complicated, but the progressive degree is moderate and the tax burden is more reasonable.

[links to related words]

Tax preference refers to the general term for all kinds of preferential treatment given to taxpayers and tax objects by the state in terms of taxation.It is a form in which the government reduces or reduces the tax burden of taxpayers according to the intended purpose through the tax system.

The tax base is the tax base.Specifically, there are two meanings: one refers to the economic basis of a certain tax, for example, the tax base of turnover tax is the turnover amount, the tax base of income tax is the income amount, and the tax base of real estate tax is real estate, etc.; The basis or standard for calculating the tax payment, that is, the tax calculation basis or tax calculation standard, such as the turnover in business tax, etc.

(End of this chapter)