China's Inheritance Tax Contradicts State-Ownership of Land

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• published: 03 Oct 2013
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Follow us on TWITTER: http://twitter.com/cnforbiddennews Like us on FACEBOOK: http://www.facebook.com/chinaforbiddennews Liu Huan, Cabinet advisor and deputy director at Central University of Finance and Economics, revealed that inheritance tax was written into a draft document for the 3rd Plenary Session of the 18th Chinese Communist Party (CCP). Experts say that the premise of inheritance tax is the property declaration system. Many officials received gray income and possessed hidden properties, thus, levying inheritance tax will face great opposition. Under current laws, people can only have a 70-year leasehold on real estate, which contradicts the inheritance tax law. Du Yanlin, a professional accountant in Beijing, says it's necessary to launch an inheritance tax. It purpose is to tax the rich, narrowing the wealth gap. Currently, in China, the company and individual income tax only take a small percentage. The regime relies on indirect taxes from consumers and citizens. Du Yanlin says that levying an inheritance tax needs an environment and appropriate conditions, neither is available. For example, a basic condition is the need for a property declaration system. Du Yanlin:"We've repeatedly urged the disclosure of officials assets, they need to declare their properties. However, it is hard to carry out. If corrupt officials don't declare their assets, we can't obtain the information on rich people's property. The only way to collect the tax is from registered properties. However, the current property registration system can't accurately reflect the individual information, with phenomena such as 'Uncle Housing' or 'Sister Housing' appearing." Since September 2004, the Ministry of Finance had written a draft code for the inheritance tax. It was revised in 2010. However, it faces different obstacles from all sides, and it still hasn't yet been implemented. Feng Xingyuan, Beijing Unirule Institute of Economics deputy director, says that carrying out inheritance tax will involved the exposure of corruption. It will first be resisted by senior officials. Feng Xingyuan:"It's unlikely to be implemented anytime soon. Because there many huge resistances. Inheritance tax is based on clearly registered property. To achieve this, many cadres need to register their properties. Whether openly declared or not, their assets must be registered. Thus, regime officials and senior officials will be first to resist. As it relates to their vested interests, their corruption could be exposed." China's inheritance tax refers to giving your own property to others. The CCP claims that the inheritance tax is to accord with international standards. However, the CCP owns the land. People can only have a 70-year leasehold, but they never own it. Du Yanlin says many laws formulated by the CCP are contradictory. Du Yanlin:"You think about it, China's law system itself is not [based on] real law. It is a tool, the regime's tool. From legal point of view, each regulation must be clearly indicated, the ownership of the property must be clear. However, China's law itself is incomplete, or not thorough. It is just a tool using by the regime, thus it has many contradictions." Du says that this will cause many problems. For example, after 50 years, few years remain on the leasehold. Children will face questions on whether to take the property. If they take it, they have to pay many taxes. In addition, how can the property's remaining value be assessed? Du Yanlin says reforming the entire system of property rights can resolve these problems. But he says that the regime is unlikely to change land access to permanent ownership. Du Yanlin: "If the authorities lose the absolute right of land control, the land finance system will collapse. Then the financial support for central and local regime will rely on housing prices and selling land to obtain finances. If there is no 70 year cycle, the authorities will lose the use right to the land and cannot control the economy of the land after 70 years. So it is impossible. Ultimately, estate taxes incurred on these contradictions and problems are the result of the so-called public ownership. CCP's so-called"rural collective ownership"and the "owned by the whole people"concepts are very vague and absurd. Property right must clearly indicate each individual person, only then can the law judge who the property belongs to. Experts say that only the privatization of land can resolve the estate duty problem. 《神韵》2013世界巡演新亮点 http://www.ShenYunPerformingArts.org/