The tenth meeting of the Central Financial and Economic Commission pointed out that it is necessary to adhere to the people-centered development thinking, promote common prosperity in high-quality development, correctly handle the relationship between efficiency and fairness, and build basic institutional arrangements for the coordination of primary, redistributive, and tertiary distribution.
Recently, Han Wenxiu, deputy director of the Central Finance Office, once again mentioned common prosperity at a press conference held by the Central Propaganda Department. Han Wenxiu stressed that the third distribution is on a voluntary basis, not mandatory, and the national tax policy should give appropriate incentives and play a supplementary role in improving the distribution structure through charitable donations and other means.
So what exactly is a triple allocation? What's next? Focusing on a number of core issues of the "third distribution", the first financial reporter interviewed Tang Min, counselor of the State Council and vice chairman of the Youcheng Foundation.
CBN: The above-mentioned meeting mentioned that to promote common prosperity and build a basic institutional arrangement for the coordination of primary distribution, redistribution and tertiary distribution. What is the relationship between them?
Tang Min: First of all, the basic concept of cubic distribution is very clear. Primary distribution is based on the distribution of the market, such as the wages of workers, the profits of the company, the rent of the ground, etc. Redistribution is regulated by the state through taxation, such as corporate income tax, personal income tax, etc. It's mandatory, and the state reuses taxes into defense, foreign affairs, infrastructure, and many public services. The third distribution is different from these two kinds of distribution, which is under the influence of moral culture, the social forces help the poor and the weak, such as private donations, charity, volunteer actions, etc. The key here is voluntary, the donation of entrepreneurs and the public is voluntary, and the provision of volunteer services by the masses should also be voluntary, not mandatory.
The third distribution is a supplement to primary distribution and redistribution, not the mainstream of achieving common prosperity. One of the important reasons is that the scale of the third allocation is relatively small. For example, in recent years, the combined cash and materials received by public welfare charities in China are only about 0.15% of GDP, and even the United States, where charitable donation activities are more fully carried out, is only about 2% of GDP in that year. On the other hand, China's primary distribution reaches about 80% of GDP, and the redistribution is about 20%. Therefore, they are not on the same order of magnitude at all, and they are not a three-point relationship. It is a misunderstanding that some people pin their hopes for common prosperity on the third distribution.
However, it should be emphasized that although the amount of the third allocation is not large, a supplement to the first two allocations also has a very important significance. With this money and materials, you can do some public service activities in the fields of education, health, pension, environmental protection and other fields, and the public welfare charities supported by the third distribution are very active. Moreover, the development of public welfare charitable activities is not only measured by money, many activities require a large number of volunteers to contribute their time and skills, which are useful supplements to the market economy and government public services.
CBN: Compared with the primary distribution and redistribution, the third allocation has been mentioned very little before. What is the background of this re-enactment?
Tang Min: Actually, the academic community has been studying the third distribution problem. The Fourth Plenary Session of the Nineteenth Central Committee of the Communist Party of China also wrote the third distribution into the central document. The importance of the third distribution is emphasized now because in the future we will pay more attention to reducing income disparities and promoting common prosperity.
For quite some time, our focus has been on poverty alleviation. Of course, poverty alleviation itself is also reducing income disparities, but there is still a difference between promoting common prosperity and poverty alleviation. Poverty alleviation helps the poorest people in society, while common prosperity reaches everyone. Today, China has eliminated absolute poverty and the scope of charitable services is broader. For example, the revitalization of the countryside facing all farmers is becoming the main battlefield of charity and public welfare, and also the main battlefield of common prosperity. Rural education, medical care, industrial development, and farmers' income increase will all be the main issues of concern for charity and public welfare in the future, and it is also an area where the third distribution can play a greater role.
Second, from the perspective of the supply side of social donations, the scale is also expanding rapidly. China's first generation of entrepreneurs have retired or are preparing to retire, and many are thinking about how to make more sense of the wealth they have created in the past. At the same time, a large number of young people, including second-generation entrepreneurs, have been influenced by public welfare philanthropy and new business ideas, and they are more willing to invest time and energy in charity. With the continuous expansion of china's middle-income population, they are investing more time and resources to participate in public welfare charity activities. Unlike the situation in developed countries, for a long time, China's charitable donations were mainly the behavior of a small number of entrepreneurs, except for the time of major disasters, the participation of the broad masses was not enough. But that's changing.
Third, from the technical point of view, the application of blockchain, artificial intelligence and other technologies has reduced the cost of participating in public welfare charity activities and improved the efficiency of matching demand and supply resources. For example, we are imagining the use of blockchain technology to establish a mechanism similar to a public welfare charity bank, which permanently records all public welfare donations and volunteer activity time, and in the future, it is possible to exchange public welfare time and material in a similar way with points, so that public welfare can also get some returns in addition to spirit, material or service. With these innovative ideas and cutting-edge technologies, it is possible to overtake China's public welfare charity and walk in the forefront of the world.
CBN: Han Wenxiu also mentioned that "the national tax policy should give appropriate incentives", what incentive policies are referred to here? Do the inheritance taxes and property taxes that everyone cares about fall into this category?
Tang Min: Generally speaking, property tax and inheritance tax belong to the category of redistribution, not the third distribution. The tax incentive policy mentioned here, I think, refers to the policy of "donation tax exemption". According to the provisions of China's tax law, the donation expenditure of an enterprise for charitable activities and public welfare undertakings is allowed to be deducted when calculating the taxable income within 12% of the total annual profit; the part exceeding 12% of the total annual profit is allowed to be deducted in the calculation of the taxable income within three years after the carry-forward. An individual's donation, the amount of which does not exceed 30% of the taxpayer's declared taxable income, may be deducted from his or her taxable income.
CBN: In the past, there have been doubts about the credibility and transparency of some public welfare organizations, what do you think? In addition, what problems still exist in China's public welfare organizations that need to be broken?
Tang Min: Everyone has the power to supervise public welfare organizations, which can be transformed into a benign supervisory force. In the past few years, some problems have occurred in individual public welfare organizations, but compared with hundreds of thousands of public welfare organizations in China, these are very few. Not only the public welfare community, which industry is perfect? China has a charity law, there is a management system for public welfare charities, and problems will be dealt with according to law, which will make China's public welfare undertakings develop more healthily.
China's non-profit organizations currently have three major deficiencies: insufficient resources, insufficient capacity and insufficient influence. These three deficiencies cause and effect each other, but the lack of influence is the most important. For the solution, I call it to use the "new barrel theory of public welfare", that is, to regard each public welfare organization as a wooden board, and organically assemble and combine these pieces of public welfare wooden boards, and it is possible to become a new wooden barrel. In other words, nonprofits need to unite to do big things.
In addition, the scale of public welfare in our country is still too small. Taking 2019 as an example, the donation of funds and materials received by the Mainland of China is equivalent to 0.15% of China's GDP in that year, and the charity donation of the United States in the same year accounted for 2.1% of the GDP of the United States that year. At the same time, the proportion of individual donations is too low, in 2019, Chinese corporate donations accounted for 61.7% of the total donations, and individual donations accounted for 26.4%; the proportion of individual donations in the United States was about 70%, and corporate donations accounted for only 5%.
Therefore, the main work in the next step is how to scale up and encourage more parties to participate in public welfare charity. At the same time, it is necessary to improve the service capacity of public welfare charities and unite them, so that China's public welfare charities can do a good job and make the scale bigger.