Fan Dayu (

China Youth Daily): Individual income tax is closely related to everyone’s immediate interests, and thus the draft amendment has received wide attention. The public is most concerned about the income tax threshold. The cutoff point is a fixed figure for a period of time, and is thus easily detached from everchanging commodity prices and the public’s income levels. The 3,500-yuan threshold is obviously lagging behind the surging economic growth that China has seen in the past decade. To raise the cutoff point to 5,000 yuan, as the draft amendment proposes, will greatly relieve the middle- and low-income classes’ taxation burden and help to increase their income and boost society’s consumption capacity.

Individual income tax helps to adjust wealth distribution and balance social wealth. Highincome earners have the obligation to pay more taxes. However, in China, high-income earners’ tax payments are disproportionately low, while middle- and low-income earners are burdened with relatively high taxes. The reason for this inequality lays in taxation classification