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1、Social Security tax system in China, the introduction of defect analysis Abstract: The existence of social security taxes regressive nature of double taxation and other deficiencies in the system, but its introduction can effectively solve the Social Security funding gap. In this paper, in-depth ana
2、lysis of its deficiencies in the system based on the proposed introduction of social security taxes in our system of design ideas. Keywords: social security tax deficiencies in the system regressive double taxation China has basically established a socialist market economy to adapt to the social sec
3、urity system framework, but the financing of social security has never been effectively addressed. Social Security tax is to raise social security funds specifically levied a tax. Almost all developed countries and some developing countries have been the introduction of social security tax. Learn fr
4、om countries around the world the experience of the introduction of social security taxes, social security fees to tax to resolve the issue of Chinas Social Security funding gap. However, most current theories of the social security tax levy remains the need for feasibility level, the current world
5、system of social security tax itself but less defects and other issues addressed. This paper analyzes the deficiencies in the system of social security taxes and put forward Chinas introduction of the Social Security tax system design. First, the social security tax system defects in the performance
6、 of 1. Social security tax is regressive in nature Social security taxes generally have a stronger regressive, mainly because the majority of countries have taken the proportion of tax rather than a progressive tax rate; and provide for wage and salary income in the only part of the levy limits to c
7、apital gains and other income excluded; and without considering the size of household, or other special circumstances. Because wage income is only a part of personal income, but usually the more the rich, wage income of the smaller proportion of total wealth, so even if there is no maximum limit, th
8、e proportion of tax taken alone is concerned, the personal wealth of the social security accounts for ratio has a strong regressive. Then, taking into account the maximum of its regressive nature of a more marked. 2. Social security tax is unfair tax burden The universal provision of social security
9、 taxes by employers and employees respectively under the employees wage income by the rate of pay, the tax base is mainly wages and salaries and other labor income. Although the taxpayer that he is different, but the social security taxes fell on the final destination of all employees. Employees to
10、pay social security tax can not be transferred. Since the universality of social security tax levied on employees not to evade taxes through transfer possibilities. That is the same as with the personal income tax, employee social security taxes paid can not be shifted. Employers pay social security
11、 tax will ultimately be transferred into the employee. In the short run, employers can pay their own social security taxes, by raising the price of goods and services tax passed on to consumers, resulting in reduced product demand, output and employment is also reduced, unemployment will increase, r
12、educing real wages of workers the end of that part of the employer to pay Social Security tax burden is actually committed by an employee. In the long term, due to an employees wages variable, so an employer can reduce wages by way of their social security taxes paid to employees. Therefore, the ult
13、imate tax burden of social security taxes will be passed on employees, which is obviously not fair. 3. Of double taxation of social security taxes Because wages and salaries of workers labor income is a personal income tax and social security taxes, a common tax base, so the social security tax on t
14、he existence of a double taxation problem. How to avoid the double taxation burden on the different system designs are bound to the residents of the redistribution of income with a corresponding impact. Second, the social security tax system analysis of defects 1. Social security tax is regressive a
15、nalysis of Leading to regressive social security tax is an important factor is the tax basis of social security taxes. Abolition of tax based on the ceiling of the high-income earners is neither fair nor inefficient. Thus, lower social security tax is regressive in nature, you can start from a lower
16、 tax basis. If you do not tax based on the minimum requirements, you must all mandatory taxes, which is obviously unreasonable; However, if the minimum limit, then all low-income persons below this limit will be excluded from the social security system , but also contrary to the social security syst
17、ems integrity. Original intention of the Social Security tax income transfer to low-income persons; and to this, the individual income tax is levied for high-income earners tax. From the theoretical analysis, through the personal income tax for social security financing of the most scientific and ra
18、tional, while the social security fund has been high-income segments of abundant financial resources, on the other hand, social security tax is regressive in nature may be offset to some extent, and to a certain extent, solve the problem of unfair income distribution in China. But this policy is put
19、 into practice on the premise that in the corresponding period of the formation of our country a better personal income tax system. To solve this problem, as part of the personal income tax revenues assigned to the Social Security Fund and the corresponding implementation of negative income tax syst
20、em should be entirely feasible. However, Chinas personal income tax system is currently inadequate, now only consider the two separate taxes until the time is ripe and then merging two taxes. 2. Social Security Tax Tax Analysis of repetitive Social security taxes and personal income tax due to payro
21、ll tax income share a common basis, there is a double taxation problem. There are two main ways the current international response. Through the social security tax treatment of income and expenditure to set off against double taxation. Specifically there are two forms: first form of social security
22、taxes as a licensing program, allowing the individual income tax deductible, which is essentially a tax deferred preferential treatment, that is the first to make this part of the income deduction the actual deferred tax to the Social Security tax into personal gain time; The second form is the prot
23、ection of beneficiaries, the beneficiaries are excluded from personal income tax as the basis for the taxpayer to enjoy here, in essence, a form of social guaranteed income tax-free offer. Some countries have also adopted the above two methods. Reposted elsewhere in the paper for free download http:
24、/ The same consolidated tax base tax levy. Such as the Income Tax Act 1990, the Dutch social security tax and personal income tax levied combined to introduce a common tax basis for a unified tax declaration, a unified collection, the proceeds from the insurance tax rate by the ratio of the transfer
25、 to the appropriate government insurance institutions. Taking into account Chinas current income tax system for the classification of personal income tax system, and social security taxes and personal income tax, after integration, will significantly increase the personal income tax rate in the coun
26、trys existing personal income tax system is not perfect conditions, can only lead to the taxpayer enhanced tax evasion motive, and the resulting loss of revenue may be contrary to the original intention of the program. Therefore, the imputation tax system could only serve as a medium to long term re
27、form program to explore. At present, a system designed to avoid double taxation, or through tax treatment to deductions. In the concrete realization of form, can be used tax deferred concessions; the same time, commercial insurance and individual pension savings you can benefit from the income of a
28、duty free offer. 3. Social security tax for the financing of Functional Analysis Social Security tax is essentially a system of transfer payments and risk diversification, which fundamentally determines the fundamental role of the social security tax is income redistribution. If the Social Security
29、tax is only positioned to increase revenue, it will undermine the basic functions of their income redistribution efficiency. Chinas current value-added tax is introduced in the tax structure as the main taxes. If we simply fund-raising point of view, by raising the value-added tax rate means to impr
30、ove the social security tax is the most efficient fund-raising function. However, if the social security tax rate too high and will eventually lead to corporate product cost increases and deterioration of the competitiveness of enterprises; if the reduction of social security tax rate, with value-ad
31、ded tax for social security schemes to raise funds so that other factors also bear some of the social insurance costs, thus reducing pressure on the financing of social security taxes and social security taxes on the economy adversely affected. Therefore, Chinas current income level, if the use of v
32、alue-added tax for financing the social security system is obviously not conducive to achieving economic efficiency and social equity. But in the long term, when our higher levels of income, the income gap has a relatively small cases, the value-added tax seemed like an efficient means of financing
33、the social security funds. Third, Chinas introduction of social security tax system designed to How are we going to solve this problem, but also ensures that the introduction of social security taxes do not produce as much as possible adverse economic consequences, we need to combine our national co
34、nditions, to avoid defects in its system to design a more rational system of social security taxes. 1. With the existing system of individual accounts convergence Chinas social security system an essential feature of the target model of social pooling and individual accounts combined. I believe that
35、 this model with the introduction of social security taxes should be complementary. So how do the new Social Security tax and the introduction of personal accounts system, the interface is key. In view of Chinas national conditions, can implement walking on two legs approach, that is also subject to
36、 Social Security taxes and social security costs. Individual accounts system, independent of the accumulation of social co-ordinate the implementation of the system security system, the accumulated fund is administered by the specialized agencies entrusted with the management and investment. 2. Levi
37、ed on the choice of the system For social security tax, levied on the separation of taxes levied and comprehensive in nature, and there is no difference, it is only dealing with the levying of an object on a technical difference. As the old-age pension, medical care, unemployment insurance, and othe
38、r security items, which collected objects are the taxpayers wages and salaries or business profits, so social security tax levied on the system in the choice of suitable integrated levied. 3. Tax elements designed to Taxpayers: Chinas national conditions determine the scope of our taxpayers can not
39、be too narrow, but the level of protection can not be too high. Therefore, Chinas social security tax of taxpayer should be identified as follows: Where in our country to obtain wage and salary income citizens, as well as the employment of Chinese citizens in our country for its employees engaged in
40、 production and business activities and other activities of the enterprises, social organizations, organizations and individuals are social security taxes of taxpayers. The scope of taxation: Chinas per capita income is not high, determine the security programs of social security tax should not open
41、 too much, should now be limited to pension, medical care and unemployment three areas. In addition to other projects, it should be a general financial expenditure by the government to give them protection. As for injuries, disability and so on, can be settled through commercial insurance. In additi
42、on, from social security taxes and Chinas current social security system convergence point of view, the payment of social insurance, including basic old-age insurance, basic medical insurance, unemployment insurance three kinds, which for the three major insurance money into Social Security Tax Proj
43、ect has laid a legal basis. Taxes: Social Security tax rate to determine it is necessary to take into account the needs of social security payments, but also take into account the taxpayer can afford. If social security tax tariff lines are designed to basic old-age insurance, basic medical insuranc
44、e and unemployment insurance three items and social security taxes tax burden should be the sum of three lines, and the ratio of tax rates should be adopted. Because the proportion of tax benefit the tax system simplified, more in line with the principle of giving priority to efficiency and fairness
45、. As a result of the different regional economic development situation, the rate difference can be minor fluctuations, in order to facilitate labor mobility. Tax basis: To ensure that social security taxes and social security taxes reflect a fair burden of tax should be set based on the employer to
46、pay workers the full wage money income (including bonuses, allowances) and more than a certain threshold above the welfare income. Administrative departments and institutions to pay the taxes could be included in the budget in order to avoid duplication of taxable. In addition, in order to take care
47、 of low-income, social security taxes should be required threshold, the threshold size may be reference to the minimum standard of living of Chinas current standards. References: 1 Wang Fengyu. The introduction of social security tax is a general trend J. Chinese Labor and Social Security :2006,1:56
48、-58. 2 Zhang Qi. Chinas introduction of social security tax related measures should strengthen the building of J. Economic Research Reference :2006,7:27-29. 3 Junfang. Chinas need for the introduction of social security tax and the feasibility of J. Tax Research :2006,10:86-87. Reposted elsewhere in the paper for free download http:/
