Netizens, experts divided on estate tax

By Wang Ying (China Daily)
Updated: 2007-07-11 06:51

A recent online survey suggests that more than two-thirds of netizens would support an estate tax to help narrow the ever-widening gap between rich and poor in China.

In fact, the debate over estate tax in China has been ongoing ever since the issue was first raised a decade ago.

Jointly carried out by International Herald Leader and www.sina.com, the survey polled more than 3,900 people. Roughly 68 percent of the respondents thought that the nation should start levying an estate tax as soon as possible, while 30 percent said there was no reason to do so.

Estate taxes or death duties arise on the death of an individual. Almost two-thirds of all countries and regions worldwide levy estate taxes that limit the inheritance of wealth.

The Finance Ministry said in late 2005 that due to incomplete income information, the country does not plan to levy an estate tax in the near future.

A study last year by the National Information Center, a think tank of the National Development and Reform Commission, found that the lack of an estate tax helps widen the wealth gap in China.

But some experts argued that some developed countries and regions such as the United States and Hong Kong have been lowering their estate tax.

Gao Peiyong, a researcher with the Chinese Academy of Social Sciences:

"Its abolition provides the best proof for the necessity of the estate tax. The wealth gap in these countries and regions began to shrink partly because of the levy of an estate tax.

"The collection of an estate tax is completely suitable to China, which has seen an ever widening gap between the poor and the rich in recent years. The estate tax is one of the most appropriate tools to adjust this inbalance."

Zhu Qing, an economics professor with China Remin University:

"There is no question whether or not to launch an estate tax. The question is about timing. It is not the right time to do so because there is no detailed property registration system, no assets declaration system and no genuine banking information.

"Without feasibility and operability, the regulation will only serve as a symbol."

Shi Lingzhi, a private firm owner in Liaoning:

"It is more important to help the poor become rich than to levy taxes on the rich as the estate tax only accounts for a small part of a country's total tax income. The rich in China are rather young, in their 40s or 50s, so that there is no need for them to worry about the estate tax.

"Moreover, rich people can easily transfer their assets overseas through their family connections to avoid inspection and only the middle class will be caught by the estate tax."

 



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