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The rich can be divided into two types, one is worthy of respect, the other incur criticism. One got rich through their ability while the latter got their wealth via predatory. It is this latter kind of rich that I’ll focus on here.

Three methods of Wealth Distribution

The methods to distribute the social wealth can be roughly summarized into three types.

  1. Liberal capitalism: The government does not interfere too much in the distribution of social wealth.
  2. Welfare capitalism: The government transfers part of the wealth of the rich to the poor through taxation and other means.
  3. Crony capitalism: The government transfers part of the wealth of the poor to the rich through various means of “predation”.

Among these three wealth distribution systems, those who believe in “classical liberalism” may think that the first type is the best. Those who believe in “welfarism” may find the second type is the best. But no matter which kind of political orientation you hold, you’d assume that the third is immoral. Yet the crony capitalism is the outmost model by the Chinese Communist Party.

Let us see how the CCP robs the poor.

Taxation

China’s tax burden is not just generally high, but super high. In the “Forbes” ranking list, China ranked second in the painful taxation index. The CCP’s taxation Administration of the Ministry of Finance said that this was wrong and the calculation was not accurate, and many experts believed it was wrong. There are numerous turnover taxes in China, such as value-added tax, business tax, and consumption tax. Such taxes will eventually pass on to commodity prices. Too much taxation violates the disposable income of the citizens and it directly affects the welfare and consumption of its consumers.

Real estate

Besides taxation, let us talk about the real estate, which is a nightmare for young people. For ordinary people, it is really getting harder and harder to buy a house nowadays. Young people would want to buy a house when they get married. To make up for the down payment, it virtually means to overdraft three generation’s savings, both bride and bridegroom’s parents, grandparents. Isn’t this plunder? Many naive people would blame real estate developers. But in fact, a large part of real estate profits go to the local government!

The land in the United States is privately owned. If you buy a house, you can pass it on to the offspring as heritage. But in China, the land belongs to the government and Chinese do not have the property rights. Chinese can only leasehold the house for 70 years. After that, who know, you may still have to pay the land transfer fee.

Considering the length of this article, I only cited two examples. In addition to “taxation” and “real estate”, “medical” and “education” are two aspects also closely related to the wealth of each family since they take a considerable part of the expenses. Everyone, please think for this: who will profit from these expenses?

In the 1980s, there was a debate inside the CCP, “Political reform first” or “Economic reform first”. Later, Deng Xiaoping decided to engage in economy first. So did it plant the bane. In the absence of a complete political system (lack of a mechanism of independent checks and balances), economic reforms were carried out rashly. It created a privileged class, also known as a “vested interest group” or red families. This privileged class used political power and influence to exploit economic resources for themselves. When this “vested interest group” becomes stronger, there will be no way to carry out political reforms because political reform means to jeopardize their vested interest. Especially when the highest-ranking members of the Standing Committee became members of crony capitalism, and political reforms became even vague. When all the roads to “reform” are blocked, there is only one way out in the end-that is the revolution.