August 17, the tenth meeting of the Central Finance and Economics Commission (hereinafter referred to as the meeting) was formally held, which solidly promotes the issue of **** the same affluence is the focus of the meeting discussions.

***The concept of equal prosperity was first proposed in 1985. Since the 18th National Congress, the CPC Central Committee to gradually realize all the people *** the same affluence in a more important position, to take strong measures to protect and improve people's livelihoods, win the battle against poverty and build a moderately prosperous society in all aspects, in order to promote the *** the same affluent to create good conditions.

What is *** same affluence? At a press conference held on August 26 by the Central *** Central Propaganda Department, Han Wenxiu, deputy director of the Central Finance Office, said that *** the same affluence is the affluence of all the people, not the affluence of a few; it is the double affluence of the people's material and spiritual life, not just material affluence but spiritual emptiness; it is *** the same affluence with a certain gap still exists, not the same affluence with a neatly organized egalitarianism. ***The fundamental way to achieve prosperity is to strive for it together. To allow some people to get rich first, the first rich with the rich, help the rich, do not engage in "kill the rich to help the poor".

On the road toward the second hundred years of struggle, China should be in what aspects of the precise policy, and solidly promote the *** with the rich? In order to form an olive-shaped distribution structure with a large center and two small ends, what specific paths are worth exploring? And how to build the basic institutional arrangements for coordinating and supporting the initial distribution, redistribution, and the third distribution?

Yu Miaojie, secretary of the Party committee of National Development Research Institute of Peking University and Changjiang Scholars Distinguished Professor, accepted the 21st Century Business Herald reporter's interview in this regard. During the interview, Yu Miaojie repeatedly emphasized the importance of tax reform. He pointed out that the design of a more scientific tax structure, reduce the proportion of indirect taxes, while studying the levy of capital gains tax, real estate tax, estate tax, gift tax, luxury consumption tax and other taxes, is conducive to resolving the risk of class solidification, improve the distribution system, and better promote the prosperity of all the people **** the same.

The 21st Century: The meeting of the Central Financial and Economic Commission emphasized the need to adhere to the principle of gradual and orderly progress, and to have a full estimation of the long-term, arduous and complex nature of ****ing the same prosperity. How do you understand "long-term, arduous and complicated" in the process of promoting ****same prosperity?

Yu Miaojie: Overall, China's income Gini coefficient is high in absolute terms. According to the latest data I have, in 2020, China's Gini coefficient will be 0.41, which is lower than that of developing countries, but still higher than the international warning line of 0.4.

From the perspective of "harmonization" in the new development concept, China is facing three main areas of disharmony.

The first is the gap between urban and rural areas; when the financial crisis erupted in 2008, China's urban-rural income ratio reached a level of nearly 3.5, and since the 18th Party Congress, this value has gradually declined, reaching 2.56 in 2020, but it is still a certain gap from the level of developed countries of 1.6.

The second is the industry gap. In terms of the annual salary of employed persons by industry, the salary level of the top three information and Internet industries, the technology industry and the financial industry is much higher than that of the bottom three industries, namely, the construction industry, the catering industry and the agriculture industry, with a difference of more than three times between the top and the bottom.

The third is the regional disparity. Salary levels in the eastern region are a cut above those in the central, western and northeastern regions.

From the overall to the structural, **** the long-term, arduous and complex nature of the same affluence is reflected here. That's why the meeting pointed out the need to promote the ****same affluence in phases.

The 21st Century: the meeting pointed out that it is necessary to create more inclusive and fair conditions for people to improve their educational attainment and enhance their ability to develop, and to smooth the channels of upward mobility. What are the main factors hindering the social mobility of labor and talents? How should precise measures be taken to this end?

Yu Miaojie: The main factors hindering the social mobility of labor and talent are reflected in three aspects.

First, the restrictions of the household registration system make it impossible for the population to move according to their needs.

Secondly, even if the talents can get a household registration in big cities, they face the problem of high housing prices.

Again, the risk of class solidification is rising, as the current policy for capital owners is relatively lax, making it easier for their next generation to access resources and succeed than other classes.

In response to these problems, I believe that the adjustment of the tax system is the key. The current tax structure in China is still dominated by indirect taxes, and even after the tax reform the proportion of indirect taxes, mainly value-added tax and business tax, has reached about 40 percent. Indirect tax shifts the tax burden to consumers, and based on the law of diminishing marginal propensity to consume, indirect tax is characterized by regressivity, which increases the tax burden of middle- and low-income people. This tax structure is more than enough to regulate labor and less than enough to regulate capital, so we should increase the proportion of direct taxes, and at the same time levy capital gains tax, inheritance tax, real estate tax, etc., which have relatively high tax rates.

Forming an olive-shaped distribution structure

The 21st Century: What are the specific paths to be explored in order to form an olive-shaped distribution structure with a big center and two small ends?

Yu Miaojie: The meeting has made clear the requirements for work in five areas. In general, it is necessary to build a basic institutional arrangement for coordinating the primary, redistribution and tertiary distribution, increase the regulation of taxation, social security and transfer payments, and improve the accuracy; in detail, it is necessary to expand the proportion of the middle-income group, increase the income of the low-income group, reasonably regulate the high-income, and outlaw the illegal income.

The overall requirement is to not only smooth the channel of upward mobility, but also emphasize the bottom-up protection. The principle adhered to in expanding the proportion of middle-income groups is to emphasize the unity of efficiency and fairness.

To do so, the key to increasing the income of low-income groups is to preserve employment and market players. Under the impact of the epidemic, many small and medium-sized enterprises are facing difficulties in production and operation, we have to adopt a prudent monetary policy to relieve them. On the other hand, we can also implement a proactive fiscal policy, through tax cuts and fee reduction measures to increase the proportion of disposable income of residents in the total income.

As for the reasonable regulation of high income, it is still necessary to break through the entry point of tax reform. In addition we have to resolutely outlaw illegal income. From the above five aspects to form an olive-shaped normal income distribution structure.

The 21st Century: What is the significance of focusing on strengthening the construction of basic, universal, and underpinning livelihood protection for the elderly, medical care, education, and housing to promote **** the same affluence?

Yu Miaojie: China's economy now faces two major challenges. On the one hand, the international situation is unprecedentedly complex, and the forces of anti-globalization are on the rise. On the other hand, from the internal environment, China's population aging gradually deepened, the "demographic dividend" gradually disappeared, so we must pay attention to the construction of people's livelihood projects, and do a good job in childbirth, parenting, education, in order to cope with the great changes that have not been seen in a hundred years.

China has now implemented a three-child birth policy and its supporting measures, and the implementation of the "double-decrease" policy has also taken a solid step forward in enhancing the universality and fairness of education. We should also adhere to the "housing without speculation", from the supply and demand sides to regulate the problem of high housing prices. At the same time, we should pay attention to the work of the elderly and medical care, in order to make adequate preparations for the "deep aging" society.

How to improve the third distribution

The 21st Century: The meeting pointed out that a basic institutional arrangement should be constructed to coordinate and support the initial, redistributive and third distributions. What are the connotations and characteristics of each of the three?

Yu Miaojie: The primary distribution mainly relies on the market, more work gets more, less work gets less, and no work gets no reward, and participates in the distribution in accordance with the marginal contribution of various factors; the core goal of the primary distribution is to make the economic cake bigger, and the emphasis is on efficiency.

Redistribution is mainly regulated through taxation, social security and fiscal transfers, emphasizing fairness.

Third redistribution is mainly guided by moral and social values, encouraging social forces to participate in donations and charities to better achieve the goal of "bringing wealth to the first and the second".

The 21st Century: What aspects should be emphasized to improve the third distribution system? How to effectively avoid the "black swan" risk in public welfare and charity?

Yu Miaojie: In 2019, China's donations accounted for only 0.15% of GDP, and the number of donations is still relatively small. The culture of charity and public welfare has also not been y rooted in people's hearts, and the proportion of individual donations is less than 40%, while developed Western countries have reached the level of 75%. The rich people's awareness of donation is also relatively weak, more wealth through the intergenerational inheritance of the way to manage.

To this end, we need to advocate that high-income groups and lucrative corporations shoulder their social responsibility and devote themselves more to public welfare and charitable causes.

On the other hand, the design and reform of the tax system should be more scientific, and here I would like to make five points.

First, the proposal of levying capital gains tax, real estate tax, inheritance tax and gift tax should be studied as soon as possible.

Second, we should promote the formation of a personal income tax system with a broad tax base and low tax rates.

Third, differentiated tax rates should be implemented for different industries. Enterprises committed to scientific and technological innovation should have their taxes reduced, while industries with abnormally high incomes, including the entertainment industry, should be heavily taxed.

Fourth, a consumption tax on luxury goods should be studied.

Fifth, tax incentives for donations should be given full play.

How to effectively avoid the risk of "black swan" in public welfare and charity? We should learn from the experience of developed countries, the establishment of a sound accounting and auditing system in the public welfare charity, to avoid the phenomenon of false public welfare, real money laundering.

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