Why only 2% of Chinese pay any income tax
economist.com
economist.com
We've become indoctrinated into thinking income tax is the norm. Nobody questions it but for much of US history, people viewed taxing work as an evil. And income taxes was a temporary tax instituted to fund wars ( civil war ). For most of american history, we didn't pay income tax.
[0] https://www.npr.org/sections/money/2018/07/18/630267782/epis...
(I don't have time right now to listen to the episode unfortunately).
Yet, car taxes amounts to only 44 billion NOK in income for the state per year (it was 70 billion NOK in 2007, before electric cars became popular here) [1]. The income/fortune tax on the other hand amounts to 248 billion NOK in income to the state per year [2].
Car taxes are nowhere near sufficient, and will never be. If taxes were increased to even more per polluting car, it would just drive even faster adoption to electric cars and a even more rapid car tax income decline. Replacing the income tax with a personal car carbon tax can't work.
[1] https://www.aftenposten.no/okonomi/i/Vy9xV/Bilavgiftene-har-...
[2] https://www.regjeringen.no/contentassets/62bcdd722d344cd0ac6...
Sounds like a good way to lose tax revenue.
However, I read the transcript of the podcast now, and it turns out it doesn't actually talk about replacing the income tax with a carbon tax, but rather reducing the income tax and offsetting the reduction with an increase of carbon taxes.
That on the other hand is a great idea, it's much like we're doing in Norway already.
Initially when the parent comment mentioned the income tax, I didn't remember that it would be used to offset a carbon tax. Their point about discouraging work made sense and was the thing I remembered.
If low income earners pay a higher effective rate than they would under income taxation, which is to be neutralised by credits, and higher income earners pay a lower effective rate, who makes up the deficit?
It turns out if just one country tries do do that, it's pretty much impossible to correctly tax items that go in or out of the country border though. An error in either direction (too much or too little tax) will severely harm local businesses and the environment.
The government concocted a scheme that is a bit involved, and complicated, and clever. There are actually a lot of different sorts of taxes VAT, sales, etc etc etc. Some optional, some not.
In terms we'd be familiar with, the "income tax" over there is charged on the business side. Imagine that you didn't have to pay income tax, but your employer cut your salary 30% because he had to pay a "social harmonization insurance fee" or some such nonsense for each of his employees. The employees, of course, would never see that, but it still, to my mind anyway, is effectively an "income tax".
It really is rare to find a developed nation where people get away from income taxes. Even when you do appear to find such a nation, if you examine the system closely enough, you can usually find how they're paying it.
You mean payroll taxes?
One of the gotchas if you plan on operating a business in China at all.
You actually get a refund on some of it (retirement) when you leave China.
And yes, VAT is super high on many things, shopping in China is pretty expensive.
Do you mean federal or state income tax? I am in one of the states with no tax paid to the state (Texas) but rest assured we still pay federal income tax as well as higher property and sales tax to make up for it.
I'm in a state with no state income tax as well (Washington). I've lived in states with income tax before. As a single individual with high income that rents their primary residency I greatly benefit from living in places without income tax compared to places with even modest income taxes.
The initial idea of small federal government with states rights was brilliant because people could vote with their feet. If you're a progressive who supports the right to abortion, legal weed, and government health care you could move to a state that supports those things and gladly pay that states higher income taxes to fund it.
In my mind that system is far superior to having the federal government shove laws down the states throats and prevents the divide between our citizens becoming so massive as we've seen over health care and taxes at the federal level.
Income taxes are, however, pretty progressive, relatively easy to levvy and practical. They are not particularly bad taxes. Sales taxes, or VAT are worse in my opinion.
I've always found very curious to not hear more about taxes in China.
It is a mystery to probably no one who have spent a certain amount of time in China that a very few amount of people are actually paying taxes. There is a few regular patterns on how they achieve evasion, but in short it is a mix of large amount of cash/cash payments, and close to 0 actions on whatever personal bank transactions. The later has always amazed me. While some countries will start tracking each transfer > $1,000, Chinese banks will probably not even bother contacting you for a transaction of $10,000 (in RMB, foreign currencies being quite regulated) or even probably more. And yes, you can buy a car or a house with this money, in Cash. No question asked. There are also some easy ways to use some complex/criminal networks of money laundering in order to get the RMBs out of China through shell companies often in tax heavens.
We all know that China's CCP is gathering a very consequent amount of data about virtually everyone entering the territory (or more). But they seem to struggle at implementing actions.
This would explain the government's efforts to reduce the amount of cash circulating in the country, and encouraging (via strong investments) mobile payments (wechat/alipay). This would also explain the very short upcoming of the "social credit score" and I've found astonishing that no one every mentioned taxes on that matter.
Now, open list of [somewhat naive and genuine] questions: - Where does the government's money comes from? [it appears to me to be mostly inflation, on an underlying crazy monster bubble] - Can a government subsist with a population not paying taxes? [apparently not, i.e social credit score] - How will the people react when they will realize they have to give away XX% of their pay when they never gave any $$? - [last but not least] Is that somewhat comparable to, say, the US [or other western countries] few generations earlier? If yes, are we paying the bill for these generations? If yes, should we start worrying? [Are taxes going to keep raising indefinitely along with debt?]
I'm sorry for a not so organized answer but I wanted to express a few comments about things I've seen myself. The [] answers of the questions are personal guesses/notes and I would love to hear more accurate answers from people with better knowledge on the topic.
Other guesses like it's being setup, they're trying to avoid mass reactions from people, etc.
Just as a note, I'm quite sure Uyghurs have their bank account heavily tracked and wouldn't go away with transactions the same way Han Chinese would.
>>Aren't they very afraid of Uighur terrorism? No doubt that they are under heavy scrutiny.
Aren't they very afraid of Uighur terrorism?
1. Chinese enterprises have really high taxes.
2. China has VAT, which is 16%, quite significant.
3. Chinese consumption tax directly factored into the end product price, everyone is paying taxes everyday, they just don't feel it.
I too wonder how well such system works, but I guess China is in high growth mode for many many years, and we all know that growth can cover up problems. Once it slows down, it might be the beginning where things start to get interesting.
People forget that high levels of income tax in the western world is actually a fairly new thing.
Denmark for example introduces income tax withheld by the employer in 1970 (kildeskat).
Before that the situation looked much more like China today. And the size of the Danish public sector was much smaller.
The income tax history is really short. Even in US, the income tax was not significant until recent 50-70years. https://en.wikipedia.org/wiki/File:Federal,_State,_and_Local...
The China economy is behind US probably 20-30 years. Its GDP is large because its population is huge.
Why the Economist publishes this kind of low-level article?
This is actually pretty old and much earlier in development than what China is at right now.
It did not introduce the concept nor change the size of income tax, which some might interpret the comment as stating.
1. Land sales. This is a major one especially in big cities
2. State-owned enterprises. These are immensely profitable because they are often oligopolies. Imagine the US government owning Goldman Sachs, Morgan Stanley, AIG, Citigroup, Bank of America, JPMorgan Chase, Wells Fargo, Fidelity, AT&T, Verizon, Comcast, T-Mobile, Exxon Mobile, Chevron, ConocoPhillips, Philip Morris, etc etc
Looks like many people are interested in this. Combining some information from Chinese websites, the main sources of Chinese government includes the following:
- Tax income: The top categories of tax income are value-added tax and business tax.
- Operation income of state-owned companies.
- Income from state-owned properties. e.g. A chunk of income of local governments come from selling lands to real estate companies.
- Government debt.
These may not be super accurate, but just to give an idea.
Here are some points that you might find interesting:
1. There is an income tax but there is no income tax return. If you pay too much you don't get anything back. You can pay a fine if you don't pay enough. This means you have to work with finance and do lots of paperwork to reduce your taxable income. Not always worth the effort.
2. You can choose to pay sales tax or not. It is optional. Generally, individuals don't pay sales tax while companies do. Companies have to prove that they spent money and they do this by collecting "tax receipts". Some companies give everyone a tax receipt. Some companies only give it on request. The machine that makes the tax receipt takes money from the company in real time and transfers it to the government. This cannot be faked BUT they can be traded ... sometimes. VAT/Sales tax is also different for different industries (I think food is about 5% while electronics is more)
Basically, individuals have more freedom than many western countries BUT companies have a lot more restrictions. It is a very clever system that "mostly" works.
I went to a restaurant and they offered us a drink at the end of the meal in exchange for no asking of receipts
Individuals could, for example, request a discount from a restaurant for not requesting a tax receipt (discount being in the form of some free Sprites or other small token). Smaller places might accommodate this, larger ones would not.
Sales tax is charged on the sales price while VAT is charged on every step of the production process.
VAT is very hard to avoid. All of the inputs to your business have to have VAT charged on them - if your business didn't pay VAT on your business expenses in China, you can't deduct them as expenses, which increases the business tax you pay.
Several years ago, when I still had a business in China, you'd actually have to paste physical tax invoices into a paper book and submit it with your accounts to the relevant taxation authorities.
Chinese consumers pay very high taxes on consumption both because of the VAT system which is essentially invisible and hard to avoid and because of very high import taxes.
It was always interesting that they think they don't pay much tax but are also obsessed with buying things overseas where the prices are usually cheaper.
As other posters have noted, payroll taxes are an income tax. Places like the USA split payroll taxes 50-50 between the employer and the employee. In China, payroll taxes - called "social insurance" - are skewed towards the employer. It's been 5 or 6 years since I've employed people in Mainland China, but if I recall correctly, the company "contribution" to social insurance was on the order of 21% while employees only had around ~6% of their paycheck withheld to cover their portion of the tax.
From the business's perspective, all of these taxes are part of the employee's pay. If an employee asked to be paid 10000, she might only take home 8000 after social insurance and income tax withholding while she'd cost the company 12000. In reality she was being paid 12000 and the government was taking away 4000 of her money each month. (Rough numbers)
It was common earlier in the decade to have potential hires ask for a certain salary after tax and then expect the company to pick up the extra. This was because many businesses at the time would pay cash under the table to avoid these tax expenses.
If you're interested in learning more about tax invoices in China, you can check out a post I wrote about them ~10 years ago: https://www.larrysalibra.com/10-things-you-didnt-know-about-...
This is the reverse of how VAT is supposed to work. End-users pay the VAT - companies can be end-users, but usually aren't, whereas individuals always are.
Also it doesn't apply to small companies only large companies.
Is it optional by law? or is it just that many sellers opt to not collect sales tax if you don't ask for a receipt?
> Basically, individuals have more freedom than many western countries BUT companies have a lot more restrictions. It is a very clever system that "mostly" works.
More freedom how?
From what I've seen (I have family over there), it's much less restrictive in most ways in terms of regulation and licensing. It is a very regulated society in some ways, but a wild west caveat emptor laisez faire anarchy in others. Also what regulation there is can often be circumvented by the right payments to the right people, which is a form of freedom if you squint at it right.
There's also little in the way of consumer rights. Of course if the anarchy gets too disruptive, in go the police and it gets bad for everybody. It's Big Stick regulation. The only stick they have is a big one, so they tend not to use it often, but when they do....
Take the baby powder doped with Melamine. There is no real enforcement of quality controls, but when the scandal went public and there was a huge scandal they tried and executed - actual shot in the head killed - some executives. A few months later it transpired that the confiscated baby milk powder had 'dissapeared' and was back on the market. By that time the public outcry had died down though.
Laws are often strict but loosely enforced unless it is a priority.
As for freedom there are fewer regulations on individuals. It isn't really possible to understand until you experience it. Oppressed in some ways. More free in others.
The "tax return" is the form you fill out that computes your taxes. The "tax refund" is the money you get back if you had overpayed. Do you really mean there's no tax return? If so, how is that calculated and how is the money taken? In the US something like 80% of tax returns could be calculated by the government on behalf of the tax payer, but for whatever reason that hasn't been implemented. Is it something like that?
The reason is that the USG doesn't have a prior knowledge of material facts that may change your return, most notably deductions and charitable donations (especially small monetary donations, in-kind contributions, used goods such as clothing, etc). You're probably right that a vast majority of returns could be accurately calculated on January 1 because they don't have a 10K, Schedules A or C, but they don't know which returns fall into that category.
Simplification of the tax code could go a long way toward increasing that percentage but I'm not sure it could ever be enough to have the government simply tabulate a bill or refund for every citizen.
For most 40-hr/wk, full time employees with one job, they should net a '0' refund, and the return should be automatically completed based on their employers weekly/quarterly filing of payroll tax records.
Only with eliminating the distinction between the standard and itemized deductions, and only for employees who work no overtime and earn no bonus. Who also don't have any post-tax activities that affect their tax liability (IRA contributions outside of an employer-sponsored 401(k), charitable contributions, 529 plan contributions). Who also don't have any out-of-pocket healthcare expenses beyond that threshold.
Most. Not all. None of your exceptions changes things. The IRS should assume a net-0 based on tax records, and if the person wants to do something else, they're free to file a return.
The birth of a Chinese Republican party...
Summary: Large portions of people are involved in small mom & pop shops. Most of these shops do business in cash. Most even don't register with tax department. They use bribes to avoid getting fines.
Yup. That's where corruption actually starts in India.
In China, companies are in charge of paying the income taxes for you but they usually have the means to dodge it, and the workers are complacent since they benefit from it too.
If China starts cracking down on it, lots of Chinese with high leveraged mortgages (up to 70% of their income sometimes) will be in trouble.
Lived in the US for a couple of years, I can't imagine IRS doing that to my bank account
Also, to the @awsedr58479 's question: Chinese consumption tax is crazily high. Most people don't know they are paying it since it's structured into the price tag. Also the companies are paying quite a lot of taxes
As seen in other comments, middle classes are the one who will likely pay the most. Lots of "legit" companies/workers are paying income taxes; they represent the 2%.
I'm not entirely sure why, given the number of basic items that don't attract vat (rent, train fares, food).
Buy a new car though and you're paying tons.
Many high-earners aren't 'spending' their money, they're investing it to make more money
Whereas low-earners are spending their pay cheque before the next one arrives.
That's just the primary way to pay income tax in China. People usually don't file tax returns on their own. Their employers calculate the tax they should pay and deduct from their salary automatically
Many people in China don't know this consumption tax, and some may say "I don't pay any tax to gov" and of cause it's not true.
[1] https://en.wikipedia.org/wiki/European_Union_value_added_tax...
[2] https://en.wikipedia.org/wiki/Value-added_tax#Around_the_wor...
Food is zero rated in the UK.
I seem to recall there was a thing about sanitary towels that needed a law change in Brussels, in order for us to zero rate them.
Edit: From the GPs reference "requires a minimum standard rate of 15% and one or two reduced rates not to be below 5%. Some EU members have a 0% VAT rate on certain supplies; these states would have agreed this as part of their EU Accession Treaty"
So its possible the GPs country doesn't allow zero rated VAT.
As far as I'm aware, no organisation has the right to reinstate a Direct Debit on your account without your permission when it has been closed [1]. If you gave notice to your bank that it should be cancelled, and payment was still collected without your subsequent authorisation, you should have been able to request a refund directly from your bank [2].
[1] https://www.directdebit.co.uk/DirectDebitExplained/Pages/Can...
[2] https://www.directdebit.co.uk/DirectDebitExplained/Pages/Can...
The threshold at which tax becomes payable was raised from 3,500 yuan ($503) to 5,000 yuan a month on October 1st. The finance ministry says the number of people liable for income tax should fall to 64m as a result.
Is the article correct that only 64M out of 1.1B people will pay income tax or did they miss an order of magnitude? Just trying to calibrate since only 64M people making ~>$750/month seems like a low number for China.
I read it as 64M people making enough to pay ~>$750/month in taxes
I mean, it’s obviously much more complicated, but that’s the gist of it.
On top of those taxes, to get the new car registered you need a number plate right? the number plate is auctioned monthly, every month you have about 5% chance to secure the number plate even if you are willing to pay the current market price of $16k. They don't call it a tax, but it is obviously a tax collected on every car owner in Shanghai. statistically, you can keep bidding every month for 2 years and still couldn't get your car registered. and no there is no way to buy such number plate at $16K USD from other owners/the black market, the only alternative option is to pay $60K USD to the gov to get a motobike number plate and convert that to a regular car number plate. Again, it is a tax.
Once you have everything above sorted out, congratulations! time to pay tax for petrol! For every $1 you spent on petrol, around 50% of that goes into taxes. Time to hit the roads right? Time to pay the toll roads then. In some provinces, we are talking about toll stations every few kilometers. Too expensive to even use the new car? Fine, just park it somewhere - $200k USD for a car park in my building, as expected, don't forget the $50k taxes/levies/agent fees/stamp duty on top of that as well.
Life in China is like playing video games in Expert mode and those numerous taxes is by far the most significant reason.
"The average price for a Shanghai plate soared to 75,000 yuan ($12,000) at the city’s license plate auction over the weekend, roughly equal to the retail price of a brand new, fully loaded Geely MK-II sedan." [0]
"Over at a new 1,700-household community in Xuhui district ostentatiously named East Manhattan, its 500 parking spaces cost 1 million yuan each." [1]
[0] http://www.theurbancountry.com/2013/02/shanghai-license-plat...
In the US income taxes are almost half of budget revenues.
It does. It is 8%.
The party owns like 15% of every company
https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...
(and most of the biggest companies in China as well)
That’s what springs to mind. I’m sure the government has found some way to effectively tax its citizens but isn’t calling it “income tax”
"Salaried professionals in big cities have long complained that they bear an unreasonable share of the tax burden. That is because firms are legally required to withhold a portion of salaries in taxes. The rich, whose income usually does not come in the form of a pay cheque, and those in the informal economy."
Economists and politicians justify tax setups in terms of efficiency or fairness. Ultimately though, practicalities are the main authors. ... whatever yields the highest tax in a given economy.
The reason tarrifs & trade taxes were such a big deal is that ports are centralized & taxable. Way back in the day, rivers, roads and bridges made good tax collection points. Land taxes were also practical.
In advanced economies, income taxes have been practical because enough income is earned as salary at firms large enough to be regulated. Firms are structured around avoiding corporate tax, not income tax.
China is at the point now where it's practical to tax income.
The west is now at a point where the ultra-rich are an attractive tax target. But, trying to apply the income tax system to them is not practical for the same reason it is practical in China.
Why aren't they now?
My country (the Netherlands) has an estate tax of sorts and at least one problem with it is that the legal system is getting clogged by hordes of people challenging the government over the valuation of their property (you pay a percentage of the property value).
This is "non-distorting" and efficient in an economst-ey sort of way. It will however, strongly affect land use and make certain uses immediately unviable. Golf courses, amusement parks...
The efficiency of moving to such a system is premised on encouraging underdeveloped land to be immediately developed. Say a skyscraper is 80% building, 20% land. That's tax efficient in that world.
It'd be a hard transition.
Total UK land is worth £5394b [2], and total budget revenue is £800b, requiring a 15% land value tax to cover total spending.
At 15% LVT, Alton Towers would attract taxation of £1.2m a year, spread over 2 million visitors, or about 64p on the ticket price.
Currently tickets are in the £30-60 range, so already attract £5-10 of vat.
A land value tax will actually mean that Alton Towers tickets would be cheaper, and as they wouldn't be paying things like national insurance contributions, overheads would be cheaper.
[1] https://www.rightmove.co.uk/commercial-property-for-sale/pro... [2] https://www.ons.gov.uk/economy/nationalaccounts/uksectoracco...
The income tax system (supplemented by all the other taxes) is the most tax generating tax system in history.
Economically speaking, Land Taxes are a consented tax by economic left and right: the consensus has been in for decades. LVT is a great tax.
In my opinion, this is San Franciscos best chance to get out of its spiral it got into: remove sales tax and put LVT. It would change the face of the city in 10 years.
But go vote that: the SF city spends 2,600U$S per household in the city. If they removed all kinds of taxes and put it on land, a single family home would have to pay that just intaxes every month. And single family homes are the politically most represented.
[1] https://nypost.com/2017/04/18/almost-half-of-americans-wont-...
https://web.archive.org/web/20030626024327/http://www.tnr.co...
compared to the US's IRS, China's tax collection agency seems, in effect, less capable because China's workers are so good at avoiding/evading these taxes.
[1] https://www.taxpolicycenter.org/taxvox/closer-look-those-who...
interesting. sounds kinda like what some US red-state voters think.
also: US media tend to portray the Belt and Road Initiative more like a plan to dominate the world than a giveaway to poor countries. quite a difference in perspective here.
This is effectively a tax on the entire economy and challenges every sector or segment to grow price (including labor wages!) or lose value.
The idea is that (for sovereign governments with its own currency) the government is the issuer of money and logically doesn't need to get money from the population or to borrow it in any market.
Taxes have three possible purposes: create demand for the currency in the population, discourage some kind of spending or managing inflation.
MMT stress that almost the only limit for government spending is inflation and that the concept of 'public debt' is irrelevant. What makes a country rich or poor it's not how much money have but what resources (natural resources, population, knowledge, infrastructure..) it has. The obvious corollary is that the way of improving the life of the future generations is not 'saving' or reducing the 'public debt' but investing in the country now.
See a short overview here: https://theconversation.com/explainer-what-is-modern-monetar...
For example, related to the subject at hand, if the Chinese government wanted to start a big infrastructure project, being the issuer of the currency, it doesn't need any kind of external financing or taxes. What could happen is that if the new project represent a big drag in the total economy, inflation would appear. A possible way of controlling this inflation is by retiring money from the economy by taxation.
well, if everyone pay tax as they should in theory, the housing bubble would not be that crazy. people ducked taxes believing they save the money and then give them back when buy house. who are the cleverest?
"When workers’ earnings rise but their after-tax income rises less—because of increases in their income and payroll taxes or declines in their benefits from government programs—their incentive to work typically declines"
Otherwise, it's just trivially true for any taxation regime: a flat 1% tax means your after-tax income rises less than your pre-tax income.
Any government plans to "tax the rich" end up hitting the people just below this threshold the hardest (usually small business owners) while multimillionaire corporate CEOs with various offshore holding companies continue to not pay their fair share.
and yet you have people like Buffett and Gates who say the exact opposite that they should be taxed more. So who is right the other rich people complaining about taxes or Buffett/Gates saying they want more taxes?
You're verbally describing the Laffer curve. Do you think they're on the right hand side?
https://www.youtube.com/watch?v=XnSaBGthkio
Governments create money when they spend and then tax it back. It is the point at which taxes are imposed that enable spending. Tax collection is the end of the transaction.
So the constraint on government spending is aggregate spending, not total tax receipts last year.
Armed with this information you can deduce that the government can purchase any output not consumed by the private sector at a fixed minimum price, so long as it doesn't compete with the private sector for the same resources, the most obvious being labour:
Once you have this understanding of how government finance works you can see that the government isn't desperately trying to "raise revenue to fund itself" but rather, needs to ensure it creates sufficient space in the economy to spend without inflation risk.
Most social programs deal with the fringes of the private sector and thus carry no inflation risk, and so long as they're counter cyclical do not need to be "funded" as such.
For everything else, taxing assets, wealth and resource usage will suffice!
https://www.nakedcapitalism.com/2014/06/randy-wray-tax-bads-...
My impression is that income tax is less damaging to investment than than corporate taxes and capital gains taxes, while also being less regressive than a sales tax or VAT.
I think it all has to do with something very simple: opportunity + nationalism. Post WW2 US was basically a land of endless opportunity spurred on by great nationalism. The reason nationalism is important is because it helps align motivations beyond just profit. Now a days most large corporations wouldn't think twice about firing all their domestic workers if they could profitably replace them with cheaper workers in another country. This is ostensibly good for the corporation, but not so great for the country, and worst of all for the workers left behind. Aside from that social bond there is also a practical commercial one. When individuals in a nation strongly bias towards domestic products, this incentivizes domestic production. E.g. - 'Made in the USA' was a major selling point.
But most importantly, I think you'll find this pattern of opportunity + nationalism is something that maps pretty well to national success in general. The US in its boom times, China today, the rebuilding of South Korea, Japan, etc.. What triggers the eventual decline there though is something far more difficult to answer. E.g. the US and South Korea continue to grow, while Japan ended up facing (and continuing to face) decades of stagnation.
This is not true.
If you draw a map of low-tax v high-tax countries there's a strong correlation between high taxes and higher GDP.
A few countries have high taxes and low prosperity.
But the one's with low taxes and high prosperity are universally 'oil rich' or 'gambling rich'.
There are no countries with almost zero taxes that are very prosperous at all. Switzerland has lower taxes, but not that low. Same with Monaco, they have very high taxes outside of income.
As far as 'nationalism' - it was more the fact that American industry was intact, and everywhere else was burned to the ground. And yes - 'the spirit' of workers and managers was very important, I would say Nationalism was part of it, but it was not the foundation. Yes, everyone was a 'leave it to Beaver' believer until rock and roll and cynicism came along.
South Korea and Japan 'boomed' just like Europe did because they were recovering from a war where investment opportunities abound, and are obvious.
China in much the same way. If there are still zillions without homes, you can easily build more homes to create value. No highways? Build them. Easy, no brainer investments.
And it's right there in the second sentence in your link. The name was pejorative, not positive.
And no pesky female or non-landed male voters ...
So if you're in the capital class, it must have been a 'golden time', yes!
for example, in china, when you sell stock, there is no tax on profit gain. however, there is a stamp tax.
Majority of policies in China, especially economic policies, China learns from either HK or Taiwan, then they are learning from either US or UK.
Like the stamp tax you mentioned, you know what it is if you trade stocks in HK or UK.
should be able to see it now!!
Very naive on economics.
A lot of differences between US and China.
2% pay the income tax is because the income is really low, that is why the jobs are moving to China. The US is losing jobs only because US labors are paid too high.
In my opinion, it is just due to economical stage and structure. China's salary is rising, so a lot of jobs are moving to other countries, like Vietnam. In the future, China government would more rely on income tax like US. But it would take another 15-20 years in my opinion.