For decades China’s lawmakers have been dragging their feet on reforming income tax laws, which have all along discriminated against low-income groups, particularly those with non-fixed incomes, such as students and writers. A reform that would stop unfairly levying these higher taxes is anticipated this year—but it has been talked about for more than a decade, and each year media reports similar news. There still hasn’t been substantial progress.
China’s Individual Income Tax Law, enacted in 1980, set the tax-free income allowance for a dozen income items—including remuneration for labor and royalties from book publishing—at $130. And while the tax-free income allowance was repeatedly raised for fixed wage earners over the last 35 years, certain low-income groups, such as migrant workers, writers, students, and other part-time, non-fixed income earners, are still subject to the lower $130 tax-free level. The value of $130 has dropped dramatically due to inflation in the intervening three decades, yet the threshold remains where it’s always been.
