Glamor Economics

Chapter 136

Chapter 17, Section 9, You Have To Pay Taxes When You Earn Money——Income Tax
Income is a very important concept in taxation.Due to different perspectives, people also have different understandings of income.From an economic point of view, income refers to the net increase in people's economic power expressed in money between two points in time.Therefore, income should include factor income such as wages, profits, rents, and interest, and property income such as gifts, inheritances, and property appreciation.

Income tax, also known as income tax and income tax, refers to a type of tax levied by the state on various incomes of legal persons, natural persons and other economic organizations within a certain period of time.General income tax can be divided into two categories: personal income tax and corporate income tax.Income tax originated in the United Kingdom.

In 1773, a large-scale war broke out between Britain and France. At that time, Britain used consumption tax as the main source of tax revenue.Due to the sharp increase in military expenditure during the war, the consumption tax revenue could not meet the needs of military expenditure. The then British Prime Minister created a new tax called "three-part synthetic tax" in 1789.It bases its tax calculation on the taxpayer's tax payment in the previous year, and imposes heavy taxes on the wealthy class. At the same time, it has various exemptions and deductions.In 1799 it was changed to an income tax.

Many western countries implement a tax system structure based on direct tax, that is, income tax.The so-called direct tax means that the income tax is generally performed by enterprises and individuals as taxpayers, and the tax burden is ultimately borne by enterprises and individuals.This tax burden cannot be shifted, so income tax is also called direct tax.If taxation is carried out on personal wage income, as a natural person, the individual is also the subject of taxation, and the tax burden cannot be passed on and is borne directly by the taxpayer.

Among them, personal income tax is closely related to our life, and it is necessary for us to focus on understanding personal income tax and its collection methods.Personal income tax is generally progressively levied in name, that is, the tax rate increases with the increase of personal income. Low-income earners use low marginal tax rates, while high-income earners use high marginal tax rates; standard deduction and single-item deduction are implemented, and the deduction decreases with the increase of personal income. , Low-income earners deduct a high proportion of income, and high-income earners deduct a low proportion of income.In this way, through the progressive tax rate, standard deduction and single deduction, the purpose of progressive collection and narrowing the gap in personal after-tax income can be achieved.

十届全国人大常委会No.30一次会议于2007年12月29日表决通过了关于修改个人所得税法的决定。根据决定，2008年3月1日起，我国个税免征额将从1600元／月上调至2000元／月。个人所得税根据不同的征税项目，分别规定了三种不同的税率：

1. Class 9 excess progressive tax rates are applicable to income from wages and salaries, and taxes are calculated on the basis of monthly taxable income.The tax rate is divided into levels according to the taxable income of personal monthly wages and salaries. The highest level is 45%, and the lowest level is 5%. There are 9 levels in total.

For example, Xiaomeng's wage income in July is 7 yuan, so he should pay taxes as follows:

Taxable income = 3500-2000 = 1500 (yuan)

应纳税额=500×5%+（1500－500）×10%=125（元）

2.5 levels of excess progressive tax rates.The production and operation income of individual industrial and commercial households and the annual taxable income of contracted and leased operations of enterprises and institutions applicable to annual calculation and monthly prepayment of taxes are divided into grades. The lowest grade is 5%, and the highest grade is 35%. Level 5 is [-]%, a total of [-] levels.

3. Proportional tax rate.Personal income tax is levied on a case-by-case basis for personal income from author remuneration, income from labor service remuneration, income from royalties, income from interest, dividends, bonuses, income from property leasing, income from property transfer, accidental income and other income, and a proportional tax rate of 20% is applicable .Among them, the proportional tax rate of 20% is applicable to income from author remuneration, and a 30% reduction is applied to the tax payable; for labor service remuneration income, the one-time income is abnormally high or extremely high, in addition to the 20% tax, a bonus can also be implemented Levy to protect reasonable income and limit unreasonable income.

For example, Professor Wang publishes a monograph and receives a one-time remuneration of 20000 yuan, then his tax payable is:
Taxable income = 20000 × (1-20%) = 16000 (yuan)

应纳税额=16000×（1－30%）×20%=2240（元）

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Main content of personal income tax

1.income from wages and salaries;
2.Production and business income of individual industrial and commercial households;
3.Income from contracted and leased operations of enterprises and institutions;
4.Income from labor remuneration;
5.remuneration income;
6.Income from royalties;
7.Income from interest, dividends and bonuses;
8.Income from property leases;
9.Proceeds from transfer of property;
10.casual income;
11.Other income determined by the financial department of the State Council.

Tax Incentives for Personal Income Tax

The following items of personal income are exempt from personal income tax:

1. Prizes in science, education, technology, culture, health, sports, environmental protection, etc. issued by provincial people's governments, ministries and commissions of the State Council, and units above the level of the Chinese People's Liberation Army, as well as foreign organizations and international organizations;
2. Saving deposit interest, national debt and financial bond interest incurred by the state;

3. Subsidies and allowances issued in accordance with the unified regulations of the state;
4. Welfare fees, pensions, and relief funds;

5. Insurance compensation;

6. Servicemen's transfer fee and demobilization fee;

7. Settlement allowances, retirement allowances, retirement wages, retirement wages, and retirement living allowances issued to cadres and employees in accordance with the unified regulations of the state;

8. Income of diplomatic representatives, consular officials and other personnel of foreign embassies and consulates in my country that should be exempt from tax in accordance with the relevant laws of our country;
9. Tax-free income stipulated in international conventions and agreements signed by the Chinese government;
10. Tax-exempt income approved by the financial department of the State Council.

(End of this chapter)