As we all know, tax evasion in the United States is listed as one of the most difficult challenges in the world, even if it is drug trafficking, you have to pay taxes well, otherwise the consequences will be serious.
Under such high pressure, the amount of tax revenue in the United States has also dominated the world for a long time, and last year, the individual tax alone created a myth of 2.18 trillion US dollars.
In recent years, the mainland's total tax revenue has also continued to soar, and in recent years, it has stabilized Japan and become the second in the world.
So, what is the amount of tax revenue on the mainland?
China's individual income tax system
According to last year's tax situation, the mainland's individual tax in 2023 will only be 1,477.5 billion yuan, and the national tax revenue will be 181129 billion yuan.
The mainland's personal income tax is about 200 billion US dollars, compared with the 2.18 trillion in the United States, which is simply a drizzle.
As the world's second largest economy, the mainland's tax system is also constantly changing, and now, it is still reducing the individual income tax, which is very friendly to the people.
Once upon a time, the mainland's tax system has always been a mountain that weighs on the people.
Since the Xia and Shang periods, the "tribute" system began, and later countless feudal dynasties, each of which collected harsh taxes and miscellaneous taxes have been pressing on the people.
It was not until the founding of the People's Republic of China that we got rid of this law and began to develop benignly.
Of course, it's a long process.
It was not until 1980 that our modern individual income tax system was also perfected.
In 2023, China's individual income tax threshold is RMB 5,000 per month.
However, in recent years, there have been increasing calls for raising the individual income tax threshold and optimizing the tax rate structure.
Some people even suggested raising the individual income tax threshold to 10,000 yuan per month, and increasing or adjusting the middle and high-end tax rates.
Tax differences between China and the United States
Judging from the data, the tax gap between the mainland and the United States is undoubtedly very large, which is also a deep-seated reason.
As the world's largest economy, the per capita GDP of the United States will reach $63,543 in 2022, much higher than China's $12,556.
The gap is even more pronounced among high-income groups, where 22.5 percent of taxpayers in the U.S. reach an annual income of $500,000, compared to 1.1 percent in China.
Income disparities directly lead to tax base disparities and tax disparities.
In addition to the income level, there are also significant differences in the design of the individual income tax systems between the two countries.
Therefore, from the perspective of income level and tax system design, the U.S. individual income tax system is tilted towards the high-income class, which is mainly borne by the wealthy, while China's individual income tax is oriented to the basic taxpayer group.
Paying taxes is a social responsibility that each of us should fulfill.
Governments raise revenues through taxation for the benefit of all citizens through taxation to be used for public services, infrastructure development, social security, etc.
We also look forward to further improving China's individual income tax policy and playing a greater role in the new development period.
The world's first tax
Individual income tax refers to a type of tax that should be paid by a natural person in accordance with the provisions of the tax law after deducting the statutory allowances or expenses and other allowable deductions.
As a direct tax, personal income tax can be said to reflect a country's economic strength, national income level and spending power.
In the United States, taxes are seen as the lifeblood of government, and the federal personal income tax dates back to the Civil War of 1861, but it wasn't really on track until the 1913 amendments were ratified.
After World War II, in order to cope with the fiscal deficit and other challenges, the government adjusted the tax rate several times, and the highest individual income tax rate was as high as 92% at one time.
In the 1980s, the Reagan administration implemented the supply theory and significantly reduced the individual income tax rate. Still, the wealthy still dominate personal income taxes due to the disparity in income distribution in the United States.
Data for 2023 shows that taxpayers with an annual income of more than US$100,000 have paid more than US$2 trillion in individual income tax, accounting for about 60% of the annual net income tax.
The current U.S. federal personal income tax system consists of seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
The minimum rate of 10% applies to individuals or couples earning less than $100,000 per year, and the maximum rate of 37% is levied on individuals earning more than $600,000 per year, or married couples earning more than $500,000 per year.
In addition to this, most states also levy state personal income tax on residents.
Of course, the reason why Americans are obedient in the face of such high taxes is naturally because of the terrifying IRS!
The IRS of terror
The biggest horror of the IRS, as the federal government's tax collection agency, is that it is powerful.
First, the IRS has the ability to review any taxpayer's records to track whether they are paying their taxes on time.
Second, if they don't want to do the investigation themselves, they can directly issue a summons to ask the individual or institution to provide relevant tax payment evidence and documentary proof.
Third, if the IRS finds that a taxpayer is in arrears of taxes, it can directly seize their bank accounts, real estate, vehicles and other assets.
Fourth, for those who deliberately evade taxes and falsify records, the IRS can refer the case to the judicial department, and when the time comes, they will be imprisoned and fined.
Fifth, and most terrifying, the IRS has the right to investigate retroactively, and it can be traced back for many years, and if you have ever evaded taxes once in your life, it is bound to find you.
Al Capone, the leader of the largest mafia in the United States, was very cunning and cunning, and all kinds of prosecutions failed to catch him.
Later, because of a bad trick, he was found to have evaded taxes by the IRS, and was sent directly to prison, and finally died of depression.
Of course, many Americans don't want to evade taxes, but the process of filing and paying taxes is quite complicated.
There are many credits for individual income tax in the United States, such as the Child Tax Credit, the Education Tax Credit, the Pension Tax Credit, etc., and each credit has complex eligibility conditions and calculations.
Moreover, there are 118 lines to fill in the standard federal individual income tax return form plus the attached schedule, involving various income and deduction items such as salary, investment, real estate, charitable donations, etc., and the professional knowledge requirements are very high.
In addition, the laws and regulations on taxation in the United States are often revised, and this set of laws and regulations has made a mess for Americans.
As a result, most U.S. taxpayers need to seek the help of a professional accountant or tax software to ensure accurate filings when filing their individual income tax returns.
In contrast, the mainland's individual income tax is extremely simple, so simple that many people don't feel that they are paying personal income tax in our daily life.