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Yao Yang: How to expand the size of the middle-income group? It also depends on education

author:Observer.com

Guide: On September 1, primary and secondary schools in most parts of the country ushered in the first school day after the "double reduction" policy, which also made this policy begin to be tested: can educational anxiety be alleviated? In the view of Yao Yang, dean of the National Development Research Institute of Peking University, the reform of the field of education is a return to educational equity, which is directly related to class mobility: through education, more and more people can flow into the middle-income group, thereby promoting social fairness and justice and promoting the all-round development of people, which is in line with the ultimate goal of "common prosperity" promoted by the central government recently. The following is the full text of the interview.

【Interview/Observer Network Liu Hui】

Observer Network: "Three distributions" refers to the distribution of social resources and wealth by high-income people in the form of fundraising, donations and funding, etc. From a realistic point of view, what is the role and significance of the "three distributions" we propose at this stage?

Yao Yang: Triple distribution is not a new concept, as early as 1992, the famous economist Li Yining put forward the concept of "triple distribution", voluntariness is its principle. The distribution of income in the country depends mainly on the first and second distributions, and the third distribution is only the icing on the cake.

At present, social contributions in many countries are relatively small, such as Europe and Japan. The United States has a large number of donations, and many private universities rely on donations. There are also many public schools and few private schools in Japan, and the more famous private universities are Waseda University, Keio University, and Sophia University, so this is not a common phenomenon.

There are many reasons why American society donates to private schools, one of which is that early immigrants attach more importance to education, and immigrants began to donate to establish schools, for example, Harvard University began with the name Ofharvard College, which is a small liberal arts college.

After the war, a number of new schools came out of the United States, such as Stanford University and Carnegie Mellon University, which were run by entrepreneurs' donations. In the 1920s and 1930s, the United States introduced some policies to encourage people to donate, and this set of incentives to encourage donations played a big role.

The Ive League is a private university that, while also financially supported by the U.S. government, is extremely limited and insignificant compared to the huge subsidies received by public colleges and universities. Because of this, accepting donations has become one of the main sources of funding for these prestigious schools.

However, in order to achieve a fair distribution of income in the whole society, donations have little effect, this amount is too small in China, and it is more of a icing on the cake.

We can't think that the state is going to do this when we mention three distributions, we don't want to "kill the rich and help the poor", nor do we want to engage in "egalitarianism", but after this meeting, we will introduce some policies to encourage everyone to donate.

Chinese entrepreneurs donate a lot of money to help poor mountainous areas, help the elderly, the sick and disabled, and encourage scientific research, such as the "Future Science Award", which is initiated by several entrepreneurs, and the prize money is more generous than the Nobel Prize. Therefore, we must have a correct understanding of the third distribution.

Observer Network: When we talk about tertiary distribution, we cannot ignore the previous "primary distribution" and "secondary distribution", and we are still in the primary stage of socialism, and we are not in a hurry to step into tertiary distribution.

Yao Yang: The advanced stage of socialism cannot rely on three distributions, and the three distributions emphasize "charity", and what the state should do and can only do is guidance, not to say that it must rely on three distributions.

Yao Yang: How to expand the size of the middle-income group? It also depends on education

Observer.com: Do you think tax policy will become the main means of achieving the goal of common prosperity?

Yao Yang: There is no way to adjust without taxes, and the realization of the goal of common prosperity is not just relying on secondary distribution, not collecting taxes, but accurate distribution, the government does what it should do, and uses the collected money on the blade, not blindly raising taxes.

Observer Network: For now, we still have to focus on solving the problems in the first two allocations. So how do we play a regulatory role in taxation in secondary distribution? What should we focus on in terms of income distribution reform?

Yao Yang: Our corporate tax burden is too high, China came from the planned economy period, the countries engaged in the planned economy basically do not tax the people, only tax the enterprises, but the tax on the enterprise does not necessarily the people do not bear the tax burden, the tax burden will also be transferred to the people, one of the manifestations is that the wages of the people are depressed.

In fact, we still rely mostly on enterprises to pay taxes, especially corporate income tax and value-added tax, which together account for more than 45% of all government revenue; there is also employee social security, our social security is also very dependent on enterprises, so the burden of enterprises is very heavy.

In this case, our income distribution reform will require an increase in the tax burden borne by individuals and families. You can refer to some of the experience of the United States, and one of the reasons why American companies are more innovative may be that taxes are relatively low.

After China's auto glass king Cao Dewang opened a factory in the United States, he found out how the tax burden in the United States was so low, and in China, he said that the tax threshold should be raised to 10,000, he did not know what the average income in the country was, and few people paid taxes at the starting point of 10,000 yuan.

At present, our individual tax threshold is 5,000 yuan, and even so, the proportion of our individual tax revenue to all tax revenue is still very low, accounting for only about 5% of government revenue.

Therefore, we should reduce the taxes on businesses and tax families. Our current personal income tax threshold of 5,000 yuan can not be lowered, can only be raised. Therefore, if you want to increase the tax burden borne by individuals or families, it is basically a property tax, and the property tax is levied on the higher income group.

For ordinary families, there is no need to worry about being taxed, because there is a basic tax exemption, so that ordinary people will not be taxed, only two or more high-income people pay taxes, this tax is very fair.

Housing is a consumer asset, beyond the daily needs of housing should pay taxes, and the property tax has an advantage, will not hit everyone's enthusiasm for production. As an asset, it will not have an impact on wages and income, and it is conducive to adjusting the distribution of income, the general people do not have to pay, there are more real estate talents need to pay.

I think real estate tax must be levied, and property tax is a big tax, because Chinese real estate is very valuable, and levying 0.5% is a very large number.

Yao Yang: How to expand the size of the middle-income group? It also depends on education

The pursuit of educational resources has spawned vicious competition in school district housing (network photo)

Observer Network: Real estate tax has been discussed, like property tax, inheritance tax, capital gains tax are discussed, but in terms of implementation, it is "only to see the stairs ring down", this meeting also said to improve the tax social security and this transfer payment adjustment, and improve accuracy. What measures do you think can be taken to ensure the accuracy of the policy?

Yao Yang: The first goal of the tax adjustment of secondary distribution is to "guarantee the bottom", use these taxes to rescue people with relatively low incomes, and then provide social security and medical insurance.

The second aspect is to cultivate the productive capacity of ordinary people, because we are not "robbing the rich and helping the poor", giving the rich people's money to the poor and raising the income of the poor, which is not sustainable. It is necessary to increase the income capacity of ordinary people, especially the income capacity of 50% of households at the low end of income distribution.

How to cultivate it? That's education. Now you have to enter the ranks of the middle class, no college or university degree, the difficulty is extremely great, the previous era of reckless heroes, peasant entrepreneurs into the middle-income class has passed, now the times change rapidly, even if you sell things online, there is no certain level of education and technology, things are difficult to get publicity, it is difficult to sell.

So education is the most important, and it is precisely in education that our investment is extremely uneven.

Our educational resources are concentrated in large cities, concentrated in relatively top schools, then the educational resources in rural areas or suburbs of cities are very bad, and there is a great imbalance.

Therefore, the government's focus in addition to the social security of the bottom function, the most important thing is to invest in education, our current college fees are completely upside down, the better the school fees are lower, the worse the higher the university fees, so that the low-income group is a double blow.

Good universities should not rank high because of good students, but because of the high quality of teaching. Now, good schools not only charge low fees, but also enjoy more state subsidies and financial support, so that the strong will be stronger and the weak will be weaker, making the gap between the whole society wider and wider.

Therefore, the tuition fees of good schools should be increased, and the distribution of fiscal revenue can be tilted to the lower ranked schools to accurately support those poor schools, rather than investing all resources in good schools.

Observer Network: You have been paying attention to the issue of educational equity, and now there is also a phenomenon of "it is difficult to get out of the cold door" in society. Some people think that class mobility is becoming more and more difficult, from the perspective of education, how can we solve this problem?

Yao Yang: Now class mobility, to put it bluntly, means that the income ability is not strong enough. If the income ability is strong enough, the children born in low-income families can also become middle class, and if the income ability is not strong, they will never become middle class.

The decline in social mobility just shows that the children of our low-income families have less educational opportunities than the middle class in the city, and we always say "chicken babies", which is a matter for the middle class. For rural families, don't mention "chicken babies", almost all of them are "herding sheep".

Rural areas do not have money to invest in children's education, nor can they give good family education, so can the class not be solidified? The middle class desperately invests in education, and it is not enough to go to college, master's and doctorates to continue reading, and rural areas can go to a high school or go to a university at will, so the gap will become wider and wider.

Yao Yang: How to expand the size of the middle-income group? It also depends on education

Priority for 2021: Take bigger steps towards educational equity. Image source: Visual China

In this current state, class solidification is largely the solidification of education. As a result, the level of education is higher for the children of high-income families, but the education level for children of low-income families is still low.

Children from the countryside have relatively little social information and resources, and with the same education, the job opportunities they get are still not as good as those of children in the city, but they are still much better than the same education that they cannot get at all. And I believe that if there is the same education, there may be a gap in the first job search, but there is a chance to flatten the gap later.

Observer Network: Educational equity also relates to our current urban-rural and regional disparities.

Yao Yang: Not only is the gap between urban and rural areas, but also the gap between rich and poor in a city is also very large, and the children in Beijing's hutongs read more books than the children in Haidian District, of course, it is also related to the family environment and investment. We are still facing the problem of uneven and insufficient development, and the gap between urban and rural areas in Zhejiang Province, a demonstration area of common prosperity, is almost gone, but in inland areas, such as Qinghai, the gap between urban and rural areas is probably more than three times.

The biggest gap in China is still the gap between urban and rural areas. This is the biggest problem we have always had, so we must engage in rural revitalization, and the government's resources are tilted to the countryside, especially public service and education resources must be tilted to the countryside.

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