Translated by: MOS Fitness Group – Lightyear
Since Xi Jinping’s high-profile announcement on August 17 to take the path of “common prosperity”, the definition of the “high-income groups” has become the focal point of the public. A few days ago, the Chinese Communist Party’s official media revealed that a family with an annual income of more than RMB 500,000 yuan may become a “high income” adjustment line. Given this trend, it is only a matter of time until the levy of the real estate tax and inheritance tax kick in.
The China Economic Weekly, also known as an economic weather-clock of the Chinese Communist Party (CCP), published a report on August 31 titled New Path to Common Prosperity: How High an Income Will Be the Target of Regulation? The report pointed out that in 2019, the National Bureau of Statistics identified middle-income households as families with a standard income of between 100,000 and 500,000 yuan. This change implies that families with an annual income of more than RMB 500,000 yuan will be identified as high-income ones. However, the report also mentions another possibility: families that earn more than three times the local average income will be regarded as high income.
The report also quoted relevant sources and claimed that personal income tax must be fully levied for high-income earners. Further, property income tax and capital gains tax should be optimized and adjusted, and cannot be levied at a fixed rate of 20%. Additionally, the real estate tax should be levied. It’s just a matter of time. Inheritance tax and gift tax will be all under consideration.
This article has attracted heated discussion after being reposted on different websites. Some readers say that all the money is contributed to the mortgage, and 500,000 is an insult to “high income.” They also commented that while officials are afraid to publicize their own assets, all they are doing is to exploit the middle-class.
This trend shows a potential collapse of the CCP’s financial system. The common-prosperity pie drawn here is just a pretense of killing the rich to save the party. Now that the CCP cannot target the rich people, it starts eyeing the wallet of the middle class.
Edited by: James Zoebel
Posted by: Mr. Z
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