Chapter 519 Tax Reform 4 Tiered Tax Rates
“Or...”
Paul glanced at the officials from various departments present here one by one.
“Should we cut the budget of a certain department?”
The conference room fell into silence.
"No! Lord Graiman."
Hansel was the first to break the silence, "I think it is imperative to abolish the tax farming system."
"Yes, the old one The system is out of date.”
“We unanimously agree with Master Graiman’s wise decision.”
Others also reacted.
Department budget cuts? This is simply intolerable. The current Government Affairs Council is rapidly expanding in size. Everyone is trying their best to get work for their departments to highlight their importance. It is impossible not to have sufficient budget.
Who wants to sit on the bench with a shrinking budget? Obviously, no one here wants to.
In contrast, let’s let those rural landlords lose their skin.
In fact, Earl Grayman’s hatred of the tax farming system is already well known in the State Council. The Earl has expressed his disgust many times in different places and at different times, so his decision today is not It didn't make everyone feel too sudden.
However, Hansel soon discovered a problem. Even if the tax collector system was abolished, would it be possible to collect more taxes?
"Lord Graiman."
He raised his question carefully, "Do you want to raise the tax rate?"
Paul asked in confusion: "Raise the tax rate?"
Hansel made an assumption, "For example, each head in the territory needs to be handed over to the lord 100 copper shields. When the tax collector is there, each person collects 110 copper shields, and he gives 100 of them to the lord. Give it to the Lord's Mansion, and keep the remaining 10 copper shields for yourself. Now you have canceled the tax collectors and directly collected 100 copper shields. But from our side, in fact, what you finally got is the same as canceling the tax collectors. As much as before."
Paul laughed, he pointed his finger in Hansel's direction twice, and said: "This is indeed a problem, Fielding, my tax director. What do you think?”
Fielding thought for a moment and then explained to everyone: "Sir Abbott's doubts are reasonable, but in theory, without tax collectors exploiting them, the people will have more money left in their hands. The extra money can stimulate their consumption desire, thus promoting the prosperity of the market, which means that more goods will circulate and more products will be manufactured, and the taxes we can collect from commerce and industry will be More.”
So, many people understand it.
“The abolition of tax collectors is only the first element of the reform.”
Paul continued: “The second element of the reform is to change the capitation tax to a property tax. And income tax. "
Everyone knows that the people in the territory, regardless of men, women, old or young, rich or poor, are counted by head, and everyone has to pay a certain amount of property. This is It is the most stable and basic tax source for the lords of Aldo and even His Majesty the King. Therefore, the population in the territory determines whether a lord is strong. The territory directly under the king has the largest population, so the king is the most powerful "lord" in the country. .
It's just that Arda has vigorously developed industry and commerce in recent years and levied taxes on goods and manufactured goods circulating in the city, so the head tax here has dropped to a less conspicuous position - after all, people cannot be like the products in the factory. created, but the poll tax is still one of the important tax sources for the Government Affairs Council.
As for property tax, in fact, it has already existed in this era, and it is very common. The house you live in has to pay tax to the lord, the land you farm has to pay tax to the lord, and the property you inherit from your parents has to pay tax to the lord. Taxes, and even livestock tax, window tax, stove tax and other messy taxes. In some territories, even if you keep a cat or dog, you have to pay taxes to the lord. When Hansel first worked under Paul, a very important task was to inventory the fields in the territory, which offended many people.
After Paul obtained the important tax source of industry and commerce, he canceled most of the taxes that he thought were ridiculous, and only retained a few such as land tax, real estate tax, and inheritance tax. Taxes are also an important reason why Arda attracts refugees more than other territories.
As for income tax, this is the first time everyone here has heard of it. Paul explained to everyone that taxes are levied on the profits earned by individuals or groups, such as wages and salaries, income from production and operations of industrial and commercial households, income from contracting and leasing operations, income from labor remuneration, interest, income from stock dividends, and property leasing. Income, income from property transfers, etc.
"From now on, everyone here and your subordinates will have to pay taxes on the salaries they receive in their positions."
Paul gave everyone a heads up first.
Old Ford said with some worry: "This may make some people complain about Mr. Graiman, so everyone should set an example and provide psychological counseling to the staff in their departments and pay more attention. Their remarks."
"This will be a huge amount of tax!"
Hansel made a rough calculation in his mind and couldn't help but be a little stunned. But yes, Earl Grayman has canceled so many miscellaneous taxes and poll taxes. Now that the finances are in difficulty, how about making up for it in other ways?
Wait, but the poll tax has been cancelled. Whether this income tax can fill the loopholes and achieve tax revenue growth has to be concluded in practice.
Not only Hansel, but every participant had similar doubts in their hearts. If property tax and income tax cannot make up for the loss of the abolition of the poll tax, then it will not be worth the loss. Even if it can be equal to the poll tax, That's just another name. What's the point of reform?
Earl Grayman must have other means.
“There is a third element to the reform!”
Unsurprisingly, Paul continued to announce.
"Whether it is property tax or income tax, we will implement stepped tax rates in the future."
Stepped tax rates?
This is the first time everyone has heard of this description.
Except for Myron and Ford Sr., who discussed the reform content with Paul, everyone looked confused.
“Let me explain it to you.”
Paul explained to the crowd, observing everyone's expressions.
“Take personal income tax as an example. A person’s income is his tax amount. If his monthly income does not exceed 1 silver shield, he does not need to pay tax. If his monthly income is between 1 and 5 silver shields, he does not need to pay taxes. If his monthly income is between 5 and 10 silver shields, he will have to pay a 2% tax. If his monthly income is between 10 and 20 silver shields, he will have to pay a 5% tax. If his monthly income is between 20 and 50 silver shields, he will have to pay 20% tax. If his monthly income is more than 50 silver shields, then he will have to pay 20% tax. You have to pay 40% tax. ”
“In short, the income is divided into ladders, with different tax rates set for each ladder. People with low incomes pay less or even no tax, and people with high incomes pay no tax. The more you pay, the more you have to pay.”
“Of course, the tax brackets and tax rates in the examples above are just for illustration. How should this ladder be divided? , and the specific tax rate that should be set for each step, it still needs detailed research by the tax department to draw a conclusion."
As soon as Count Graiman finished speaking, there was a bang in the minds of everyone present. It seemed like something exploded.
(End of this chapter)