Chapter 1100 Where Did the Money Go?

At that time, the central government was not very clear about the situation in the local areas. Due to the influence of the Cultural Revolution, many things in the local areas had become corrupt. At this time, the central government still needed the support of the local areas to restore its authority.

In a sense, the status of local officials at that time was real, had considerable influence in the central government, and was highly respected by the top leaders.

The reason for this is that the local governments themselves have the financial power and the central government needs to rely on the income of local governments to survive, and the dependence is too strong.

Under this contract system, the local governments and the central government are playing a game, and the information of both sides is asymmetric. Local governments have information advantages.

Although the central government has to revise the contract quota every few years and constantly increase the proportion and base of local governments' submission to the central government according to the situation, it still can't handle the local governments.

This is the so-called proportion of local government's extra-budgetary revenue is getting higher and higher, and even a large amount of illegal extra-institutional revenue is collected. The local governments are getting stronger and richer, and the so-called feudal economy has emerged.

The feudal economy did exist at that time, but it was not necessarily a bad economy. Although local protectionism is a bad side. But the feudal economy also has its good side.

Competition among local governments is one of the reasons for the Chinese miracle.

There was a problem in the report provided by the economic experts of the decision-making level of the Central Fire Department at that time. They assumed that local governments were evil, that is, they were self-interested, and the central government was good, that is, altruistic.

But both the local government and the central government have the internal impulse to expand power and pursue profits. The main problem is the lack of internal checks and balances and external constraints.

In other words, they should assume that both are evil, and then consider the government power checks and balances rules needed in the country. But they did not have such awareness at the time, but believed that if local governments continued to do so, then China would disintegrate like Yugoslavia.

In fact, it cannot be seen in this way. If it really leads to disintegration, it is a military problem. As long as the central government can support and control the army and can control the promotion and appointment of local government officials, it is impossible for other governments to disintegrate.

This kind of unified vertical system in China obviously has a natural fear of the weakening of the central control ability.

At that time, China was in the transition stage, which required a lot of fiscal expenditure, especially to support many loss-making state-owned enterprises. Therefore, the strategy of focusing on large enterprises and letting go of small ones was proposed in the early 1990s. Before that, some places had quietly carried out the reform of local state-owned enterprises. There was a large-scale reform of township collective enterprises around 1992, and a second reform around 1997. After these two reforms, there were basically not many township collective enterprises left, and basically all those that could be reformed had been reformed.

The driving force for reform at that time came from the comprehensive consideration of the tax revenue and profits obtained by the government from enterprises and the government's enterprise management costs. Loss-making state-owned enterprises, local and township collective enterprises, not only had to fill the holes in the finances, but also had to support so many people.

Then the government found that it was very good to develop private enterprises. There was no burden at all, and they could sit back and enjoy the fruits of their labor. Just collect taxes. At that time, there was even a phenomenon that township enterprises and state-owned enterprises were sold even if they were doing well. The reason for this phenomenon. It is because privatization has become a tool for local government system competition, and it has also become an image tool for local government officials to flaunt their ideological liberation, political enlightenment and attract foreign capital.

From the perspective of tax distribution and sharing, after the tax-sharing reform, the central government collected the bulk of taxes and some of the easiest taxes to collect. Local governments only received less than 50% of fiscal revenue.

But they had to bear more than 80% of the expenditure responsibility, and the power of affairs and financial power were seriously mismatched.

This part of the local budget revenue and expenditure gap is mainly solved through central transfer payments. For a huge transitional country like China, most of the expenditure has always been incurred by local governments. The central government has no way to directly implement many expenditures and can only do so through transfer payments.

That is to say, although the tax-sharing reform at that time was an innovation based on the original system, it was not a tax-sharing system in the strict sense. As a result of this tax-sharing, the general budget of local governments is heavily dependent on transfer payments. The central government has a lot of revenue, but not much revenue spent. A large amount of it is transfer payments. For every 100 yuan spent by local governments, more than 40 yuan is transferred by the central government.

There are two types of transfer payments, one is called general transfer payments, and the other is called special transfer payments. General transfer payments are often more transparent and calculated according to formulas. For example, the funding gap in compulsory education, public health, etc. can be easily calculated by the central government based on the per capita standard.

Special transfer payments are linked to special funds held by many central departments, and their use is not transparent. They are easily affected by the money from local governments and enterprises.

However, both have problems. First, general transfer payments are more considered by local governments. They are easily concentrated on food finance, and basic public services may still lack funds. Secondly, the transfer payment channel is too long and intercepted at every level. For example, the higher-level government often uses the transfer payment for other purposes or deducts the tax arrears of the lower-level government. This situation is more harmful to backward areas. Thirdly, many backward areas mainly rely on central transfer payments, and no longer focus on cultivating and utilizing local financial resources, forming local independent personality deficiency, and thus the local areas lose the vitality of endogenous development.

Therefore, Boss Zhu is actually not very satisfied with the reform of the tax sharing system and believes that it has not been thoroughly reformed.

But for the senior officials at the time, this change was the most appropriate, because the central government had financial resources. With money, it would become richer, and its words would be effective, and people would listen to them. There is no need to worry about the local government being disobedient, there is no need to worry about the emergence of a feudal economy, and the waistline is much stronger.

As a result, even if Zhu Laochui is determined to deepen the reform of the tax-sharing system, he is unable to promote this work in depth.

Especially now that he is facing a change of office in the near future. Boss Zhu himself knows that there will definitely be no place for him in the next government. If he starts a war at this time, some people will inevitably think that he has ulterior motives. Therefore, the further deepening of the tax-sharing system can no longer be put on the agenda.

But just leaving this half-finished project behind, Boss Zhu was not very happy. He always hopes to leave a good foundation for his successor. So when Fan Heng made a little mention of plugging tax evasion loopholes before dinner in the evening. Boss Zhu immediately grasped this breakthrough.

Those present tonight are all people from the business community, basically representatives of the business community with some status. Boss Zhu seemed to say this message very calmly about cracking down on theft and deletion. If it falls on everyone's ears, it will be different.

Everyone thought this was Boss Zhu blowing off steam and showing the central government's attitude.

Therefore, when Boss Zhu was careful with his words and everyone started the dinner, many people came to see their acquaintances. Let’s discuss this together. Topic: Will tax policies become tighter in the future?

"Who is that young man next to Boss Zhu? He's very smart." Someone pointed at Fan Wubing and asked others.

"You don't even know the famous boss of Fan's Investment Group?" Someone immediately said

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"Is he Fan Wubing?!" The man immediately took a breath of air.

In fact, there are still many people who have dealt with Fan Wubing. Although there are not many people who dare to go to Boss Zhu to ask carefully about the policy of combating tax evasion, there are people who can get in touch with Fan Wubing. Not a lot, so when Boss Zhu sat down to talk with a few older businessmen. Many people from the business community who had been in contact with Fan Wubing gathered around and asked Fan Wubing for inside information on this matter.

"Is the government going to take more drastic action to combat tax evasion?"

“Will the prior tax laws be revised?”

“Will the issue of corporate tax avoidance also be covered in this campaign against tax evasion?”

"Does the government have any specific operational plan, for example, is it preparing to set a work target of how many billion?"

Everyone had a lot of questions, and the design content was very broad. Fan Wubing smiled and listened to everyone's questions, and then raised his hand and waved to signal everyone to be quiet, "I don't know as much about this matter as you do." More or less. But when it comes to the disadvantages of tax evasion, it is obvious that this kind of behavior not only damages the national interests, but also poses a serious threat to us law-abiding operators. "

Isn't this a bit exaggerated? Everyone immediately looked at each other and said to themselves that they know your father is Vice Prime Minister Fan, but there is no need to speak for the government like this, right? After all, you are the largest industrial and commercial tycoon. If the tax policy is tightened, will it not have any impact on you?

Just to sing a high note. There’s no need to put yourself in it, right? Moreover, everyone knows it in their hearts. If Fan Investment Group has doubts about this policy, its huge influence is enough for many companies to follow suit and indirectly affects government decision-making, allowing them to adopt this policy before launching it. It’s time to think about it and decide carefully.

However, now Fan Wubing seems to have reached a consensus with Boss Zhu.

Seeing Fan Wubing's calm expression, everyone still didn't understand that they had already formed a tacit understanding.

What's more, considering that Fan Heng, Vice Prime Minister after Fan Wubing's death, Fan's Investment Group will not be able to dismantle Boss Zhu's power in any case. If that happens, it will be equivalent to Fan Wubing's dismantling of his father Fan Heng.

"The key is that everyone's positions are different." Some people secretly sighed that it seems unrealistic to expect Fan to come forward, but except for behemoths like Fan Investment Group who can raise public questions. Indeed, no company dares to express a different attitude on this issue.

Even if someone puts forward a different opinion, the influence will be limited. Not only will it not help the matter, but it will also bring disaster to oneself. Therefore, on this issue, no one really dares to say no.

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Fan Wubing was naturally able to guess what everyone was thinking. Therefore, regarding the issue of cracking down on tax evasion, he had to clearly explain its harmful effects, so he said, "You may not have calculated carefully. The annual tax revenue is about 1.7 trillion, and the loss from tax evasion is about 500 billion. What is this concept? "

Seeing that no one had any reaction, Fan Wubing opened up and said, "Let me give you an example, let's take the current education."

"A century-old plan. Education is the foundation, and the rise and fall of a country depends on education. Although there are many wise words in our ears, it is difficult for people to take them into account, because the cost of education has filled people's minds, and the government has to pay more and more attention to the increasing demand for education funding. Schools are worried about how to raise more funds, and parents are worried about countless education expenses." Fan Wubing said with emotion, "I guess you don't need to worry about this, but many ordinary people are. I want to know how much money is invested in education? Why do so many children still cannot afford to go to school?”

Fan Wubing mentioned this sensitive issue, which immediately aroused everyone's attention. After all, education, medical care and real estate are the topics that everyone is most concerned about nowadays. From Fan Wubing's tone, it seems that he is preparing to break the news. .

Boss Zhu was chatting with people there. At this time, he also noticed Fan Wubing's situation and thought that this guy was going to say something shocking again. It seemed that there were a lot of people paying attention!

"The total investment in formal education nationwide this year is about 920 billion. The total investment in education nationwide is divided into three parts. State financial allocation, social school funds, and student family education expenditures, referred to as state investment, social investment, and personal investment. "Fan Wubing said, "In today's society, the main investor in education in most countries is the government, especially in junior and secondary education. The proportion of residents' burden is less than 8% on average in the world, but the domestic reality is far from this. . This year, of the total investment in education of 920 billion, the state invested about 311 billion, accounting for slightly more than one-third, and the social investment was about 35 billion, accounting for less than 1%. Four, and personal investment is about 580 billion, accounting for 63%.”

"Oh!" The audience expressed their understanding one after another. No wonder everyone was shouting that going to school is difficult and expensive. Personal investment accounts for the majority, so of course they can't afford to go to school.

"Then where did all the money go?" Fan Wubing spread his hands and said, "The tax lost in tax evasion alone is about 500 billion every year. If these 500 billion are recovered and used to offset In terms of personal education investment, the personal investment has dropped to 80 billion! That is less than one-seventh of the current personal investment!”

"Wow!" The listener exclaimed again. He did not expect that the impact of tax evasion would be so great.

"What kind of concept is that?" Fan Wubing looked around and said, "That's equivalent to the fact that in the universities with the highest tuition fees now, the tuition fees for each student will immediately drop to a few hundred yuan! At this time, the common people will still Are there so many complaints?”