To increase disposable income, lawmakers should reduce personal income tax by further raising the threshold for taxable salaries to 10,000 yuan monthly from the current 3,500 yuan, news portal chinanews.com.cn reported Sunday, citing Wang Jian, former director of the economics department at the Chinese Academy of Governance.
The National People's Congress, the country's lawmaking body, passed a bill in June 2011 raising the taxable income threshold from 2,000 yuan to 3,500 yuan monthly so as to exempt more middle- and low-income residents from taxes and thereby release purchasing power to boost domestic consumption.
If the taxable income threshold is raised too high and too quickly, it would mitigate the effect of personal income tax as a way of creating more even income distribution, Su Hainan, director of the China Association for Labor Studies, told the Global Times Monday.
In addition to aiming for high individual income growth, the Chinese government is mulling income distribution reform, hoping to combat enlarging gaps between rich and poor, different sectors and industries, and different positions in the same organization.
Executives in fields like finance, property development and sectors where monopolies cause inflated profits had very high and fast-growing salaries, leading to less balanced income distribution in 2011, the Ministry of Human Resources and Social Security said in a report released in October.
The average annual salary of urban and township workers was 42,452 yuan in 2011, reportedly growing 14.6 percent annually. Yet the average salary for an executive at a listed company was 668,000 yuan in 2010, growing annually 18.1 percent from 2005, the report said.
Landmark building should respect the public's feeling
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