The State Council agrees to raise the personal income tax threshold to no less than 3000 yuan, reaching a broad consensus.

The State Council executive meeting held on March 1 discussed and in principle approved the "Amendment (Draft) to the Individual Income Tax Law of the People's Republic of China." The personal income tax threshold is expected to be raised. This livelihood measure has attracted much attention and heated discussion among many representatives and committee members of the Two Sessions. Many believe this signals income distribution reform, with proposed thresholds ranging from 2,500 yuan to 10,000 yuan.

　　The Standing Committee of the National People's Congress will review it.
　　The State Council executive meeting believes that strengthening the role of taxation in regulating income distribution and further reducing the tax burden on low- and middle-income earners necessitates amending the Individual Income Tax Law, raising the deduction standard for wage and salary income, adjusting the tax rate brackets for wage and salary income, and correspondingly adjusting the tax rate brackets for income from individual industrial and commercial households and contracted or leased operations. The meeting decided that after further revision, the "Amendment (Draft) to the Individual Income Tax Law of the People's Republic of China" will be submitted by the State Council to the Standing Committee of the National People's Congress for review.
　　The currently hotly debated "personal income tax threshold" actually refers to the "deduction standard for wage and salary income." Since China began levying individual income tax in 1980, the threshold has been adjusted twice: in 2006, the exemption standard was raised from 800 yuan set in 1980 to 1,600 yuan; since March 1, 2008, the exemption standard has been 2,000 yuan.
　　Currently, China divides the monthly taxable income into nine levels ranging from 500 yuan to over 100,000 yuan, with tax rates ranging from 5% to 45%.

　　"Raising only the personal income tax threshold is not enough."
　　Due to continuous price increases, the personal income tax threshold is a hot topic at the Two Sessions every year. Especially at last year's Two Sessions, dozens of representatives and committee members expressed that it should be raised.
　　Premier Wen Jiabao of the State Council revealed on the 27th of last month during an online exchange on fair distribution that raising the personal income tax salary threshold has been included in the State Council's agenda, "This is the first practical matter we are doing for the people this year."
　　Representatives and committee members interviewed by reporters yesterday all expressed that it should be raised, with suggested increases ranging from 2,500 yuan to 10,000 yuan, most believing that no less than 3,000 yuan is more appropriate. Notably, experts engaged in fiscal and tax research also remind not to focus too much on the threshold; if raised too high, it may not benefit low-income earners much, and a more scientific tax system model should be considered.
　　Jia Kang, member of the National Committee of the Chinese People's Political Consultative Conference and director of the Ministry of Finance Research Institute, also stated yesterday that it should not be a simple adjustment of the threshold. If only the threshold is adjusted without other changes, the effect will not be good. Therefore, many experts now say that the nine-level progressive tax rate should be reduced, which is one direction, for example, it can be reduced to 5 to 6 levels. There are still many aspects of the current individual income tax reform that need improvement, and currently, comprehensive reform should be integrated as much as possible.

■ Voices
　　Consensus on no less than 3,000 yuan
　　● Zheng Xinli, member of the National Committee of the Chinese People's Political Consultative Conference and Executive Vice Chairman of the China Center for International Economic Exchanges: Raising the threshold to 3,000 yuan is appropriate. This is based on a comprehensive view across the country, where the average wage level nationwide still does not reach 3,000 yuan.
　　● Feng Shiliang, member of the National Committee of the Chinese People's Political Consultative Conference: As I understand, the State Council is currently studying two plans to raise the personal income tax threshold: one is 3,000 yuan, the other is 3,500 yuan. The Ministry of Finance prefers 3,000 yuan, which is a more cautious plan and will not greatly affect national construction. However, I personally prefer 3,500 yuan, which is also beneficial to the people.
　　● Wang Yongzheng, member of the National Committee of the Chinese People's Political Consultative Conference and Chairman of Tianjin Yongzheng Tailor Shop Group: Raising the threshold is an urgent task. This adjustment should break through a bit, and raising it to 5,000 yuan is more appropriate because even workers earning 5,000 yuan currently cannot afford the soaring housing prices in many cities.
　　● Su Guocui, member of the National Committee of the Chinese People's Political Consultative Conference: Some families now have only one person working, earning about 2,000 yuan, and they are very difficult but still have to pay taxes. Therefore, the tax base should be raised to ensure more people have a good life. A threshold of 3,000 to 4,000 yuan is acceptable and should not be lower than 3,000 yuan.

　　Different regions and families should be treated differently.
　　● Zhang Xiaomei, member of the National Committee of the Chinese People's Political Consultative Conference: Raising the personal income tax threshold is very necessary. I think it can also be divided according to different regions. For example, in first-tier big cities, the threshold can be raised to 4,000 or even 5,000 yuan. Although incomes are high in big cities, living burdens and costs are also high. If it can be raised to this level, it will significantly reduce the burden on many urban workers. For some medium-sized cities, setting the threshold at 3,000 yuan is relatively appropriate.
　　In addition, the current individual income tax collection based on individuals should be changed to a family unit and an annual cycle, which basically guarantees a family's basic consumption and living needs and eliminates the hassle of monthly collection.
　　Many developed countries and Hong Kong, China, adopt "joint spousal declaration" or "family declaration" tax methods. Declaring individual income tax based on the family unit also conforms to international practice.

The 9-level progressive tax rate can be reduced to 4 levels.
　　● Zhang Bin, director of the Tax Research Office at the Institute of Finance and Trade Economics, Chinese Academy of Social Sciences: China has raised the personal income tax threshold twice. However, simply raising the threshold does not work well in practice, as high-income earners benefit more, while low-income earners benefit little. Therefore, besides the threshold issue, an important and never adjusted aspect is to reduce the number of levels and adjust the brackets. The wage and salary income currently has a 9-level progressive tax rate, and the number of tax rates should be reduced accordingly, expanding the tax brackets, which can be reduced to 4 to 6 levels.
　　Raising the threshold and adjusting the tax rate structure are improvements under the current classified tax system. In the future, China still needs to form a combined comprehensive and classified individual income tax system, integrating some regular incomes. This is expected to be achieved during the "Twelfth Five-Year Plan" period but cannot be done all at once.

　　■ Case
　　Person 1
　　Mr. Liu, monthly salary about 3,200 yuan
　　Current individual income tax: about 95 yuan After raising to 3,000 yuan: about 10 yuan
　　Saving hundreds in tax brings relief
　　Mr. Liu is an after-sales engineer at a private instrument and meter company. His usual salary is 2,800 yuan, plus a quarterly bonus of 3,000 yuan every three months. After deducting social insurance and housing fund, the average monthly income is about 3,200 yuan.
　　Due to this "uneven" salary payment method, Mr. Liu's monthly individual income tax varies greatly. According to his current salary level, when no bonus is paid, the income tax is only a dozen yuan, but when the bonus is paid, the tax is six to seven hundred yuan, which is a bit hard for him. He is now suggesting to the company to distribute the quarterly bonus evenly, so that on average, he can pay about a hundred yuan less in individual income tax each month.
　　Hearing the news that the individual income tax threshold is going to be raised, Mr. Liu was very happy. Calculated this way, he can get about 80 yuan more on average each month, "enough to buy quite a few things."
　　He said many of his colleagues earn less than him, and with families to support, living in Beijing can sometimes be tight. Now that the threshold is raised, it will give these low-income groups a bit of relief.
　　
Character 2
　　Mr. Chen Monthly salary around 7000 yuan
　　Current individual income tax: about 309 yuan After raising the threshold to 3000 yuan: about 165 yuan
　　The threshold of 3000 yuan is still too low
　　Mr. Chen is a middle school teacher, currently earning over 8000 yuan before tax each month, including about 6300 yuan in salary and more than 2000 yuan in performance bonuses. Among them, his performance bonus is not taxable, and only the salary is taxed at about 300 yuan per month.
　　As a veteran teacher with 30 years of service, Mr. Chen has experienced all stages of China's individual income tax reforms. According to him, during the three stages of changes in the personal income tax threshold, his salary level also experienced three jumps. Ten years ago, his salary was only over 2000 yuan; by 2005 it rose to over 4500 yuan, and in 2007 it increased to 6000 yuan.
　　Although he now lives without worries, as the family pillar supporting both elderly and children, he is still often surprised by the daily rising food prices in supermarkets and clearly feels the pressure of inflation.
　　Mr. Chen said that the increase in the threshold this time does not have much impact on him, "an increase of only 1000 yuan is too little." He strongly agrees with an online opinion: the original personal income tax threshold in China was 800 yuan, which could buy 800 jin of pork at that time. Calculated at today's pork prices, the threshold should be the price of 800 jin of pork, i.e., 9600 yuan. In addition, Mr. Chen hopes that the tax rates for each bracket can be adjusted downward.
　　
Character 3
　　Ms. Ye Monthly salary 30,000 yuan
　　Current individual income tax: about 4952 yuan After raising the threshold to 3000 yuan: about 4702 yuan
　　Paying individual income tax has little impact on a 30,000 yuan monthly salary
　　Ms. Ye is a manager at a foreign company with an annual salary of 400,000 yuan, averaging about 30,000 yuan per month. Her company deducts taxes monthly according to the personal income tax rate rules on all income, so she pays about 5000 yuan in taxes each month.
Ms. Ye said that now the average income in our country has increased, and inflation is severe, so it is natural that the individual income tax threshold should also be raised. Moreover, the threshold represents a low-income level, and since minimum wages have been raised across regions, the threshold should naturally be raised as well. For her, an increase of 1000 yuan will not significantly affect her tax payment. She hopes the government can appropriately lower the tax rates for high-income groups, as paying tax on one-sixth of her salary makes her "feel a bit distressed" every month.