So how does the Chinese afford stuff now?

http://www.npr.org/templates/story/story.php?stor…

7.7% of the population paying tax. What on earth does the government pay for these days? How? Trade surpluses are for companies, countries dont export, are state owned companies that dominant/lucrative?

4 Comments
 

When for whatever reasons direct taxation is ineffective, governments can use indirect methods (inflation tax) by just printing money and forcing everyone to share the burden...

 

Farmers (half the population) have their own tax system, but a huge chunk of taxes are paid for by companies and rich people in the form of VAT, corporate taxes, sin taxes (40% on cars, not including the ~50-100% import duties on foreign cars), and various sales/consumption taxes.

That doesn't even include all the money that the government takes in through land sales/rents and other programs. Moreover, since most upper echelon government officials make most of their income from bribes, salary for the bureaucracy doesn't take a very large toll on the government.

http://en.wikipedia.org/wiki/Taxation_in_the_People's_Republic_of_China

It will blow your mind how many different taxes there are.

 

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