British Tax System And Social Justice

To establish a just society is the human ideal and the history of human civilization is the history of pursuing social justice. Inequality is absolute while equality is relative. What the state and government is expected to do is to regulate and limit this kind of inequality and control it within a reasonable, legitimate range. This is the only way through which the society could realize harmonious and coordinated development. The 17th Party Congress proposed that "to achieve social fairness and justice is a major task of the development of socialism with Chinese characteristics". This requires not only the country and the government have a clear strategic goal, but also the need for practical policy levers and path. Reasonable taxation is obviously an important way to solve the above problems. This article will focus on taxes, trying to explore the relationship between taxation and social justice.Taxation is a powerful tool in the country’s macro-regulation. It could help to adjust both macro interests and micro-interests; reasonable taxation could help the country provide public goods and services that people need, without harming businesses and individuals, the enthusiasm of business development; taxation could also effectively adjust people’s incomes, narrow the gap between rich and poor; taxation is also the one of most fair and effective means that help coordinate the relationship between the nature and human being.The research on taxation is supposed to be made broadly, from the technical level to the legal, the political and the social level. United Kingdom has a significant reference for China’s tax revenue and its socio-economic harmonious development in the sense of her comprehensive tax theories and well-performed policies. Based on this, this paper took the U.K as the object of study. Hoping to find the nature of taxes and social contact and interaction by studying her economic, social, fiscal and other aspects, so as to promote the harmonious development of China’s economic and social justice.To explore the relationship between the taxation and social justice is a brand-new subject. Although many political scientists have studied the tax issues, but often only as part of the economic or social policy, few of them linked the issue of the taxation with the coordinated and sustainable development.Taken from the perspective of taxation, this research studied the evolution of the British tax system and the British political and social development through political science, sociology, management, finance and taxation, constitutional, historical and other multidisciplinary views, revealed taxation’s functions of promoting social justice, stability and sustainable development.Besides the introduction and conclusion, the paper is divided into six chapters.Chapter one of this article proposed the author’s understanding about taxation, social justice as well as the relationship between taxation and social justice. This chapter studied the basic taxation theory, social justice, taxation and the relationship between social justice and taxation, putting the paper in a bigger theoretical environment. The basic tax theories include attributes, functions and principles of tax. Social justice not only embodies the concept of a value, and also reflects an institutional arrangement; either as a kind of principles and standards can also be seen as a status and results. Tax policy that certain tax theory based on the use of various tax policy tools, basic norms enacted tax activities through specific arrangements of the tax system, to achieve specific policy objectives. It is an important part of the national economic policy, one of the important means of modern government intervention to regulate the economy. The tax is social justice as an integral part of the social justice process to determine whether the process of development of the tax; tax development process, also have a significant impact on the realization of social justice. Tax development and social justice evolution is an interactive process, the interaction between the two, worthy of further observation and thinking.Chapter two describes the evolution of the British taxation before the World War II and its influences on British political, social, economic, and cultural life. Parliament’s control over the taxation marks the feudal tax system between the King and the nobles subjected to the national tax system through which king taxed the people.Glorious Revolution of 1688 became a turning point on the way of British modernization. The civil service system, the establishment of the Central Bank, the development of the public debt, the establishment of the budget system, Pete tax reform, as well as the income tax of the generation and development of financial revolution led to the United Kingdom becoming a modern state. With the development of the capitalism, the professional tax administration agencies replaced the tax package, greatly reducing the costs of taxation, improving national fiscal revenue sources and reducing unnecessary financial expenditure. In addition, it also promoted the development of public finances. During the period of Queen Victoria’s reign, the British taxation gradually embarked on a normal path of development. The tax payers of the indirect tax are average consumer, while the tax payers of the direct taxes come from the rich class which contributed a lot to social equity. At the same time, income tax and inheritance tax began take very important position in the British fiscal revenue, which makes tax collection targets shifted to the middle and upper classes based on wealth from ordinary people. This is the first step towards a modern tax system. The amount of wealth, the income level of the establishment and development of the system of progressive taxation measure, reflects the social wealth as a lever to adjust the tax shift to a modern society. British progressive levy of estate duty, gradually moving towards a progressive income tax system, which paved the way for the country in the 20th century to use taxation to re-allocate social resources, the distributee social wealth so as to the pursue social justice. In short, modern U.K as the first industrial country and the city-state is the first to solve the efficiency problem, after that, it began to use the tax system to achieve social equity which has laid a good foundation towards welfare society in the United Kingdom. Central fiscal expenditure, in addition to the traditional coping war consumption is also expanded to carry out compulsory primary education, to support the activities of the local government, public health and infrastructure. The series of reform programs in 1880s had one thing in common, which is:taxation is an important weapon to achieve the target to heal society. These programs consisted primarily of pension, relief of poverty, education and so on.Chapter three explored the tax system of welfare state. First, it studied the four reasons of the formation of British welfare state:social crisis, the spread of Marxist thought, twice world wars and the outbreak of the economic crisis, "class compromise" and "welfare consensus" Secondly, it analyzed Britain "from cradle to grave" welfare system from the pension bill, the National Insurance Act and children’s education subsidies. Finally, it analyzed the tax policy’s impact on the socio-economic growth from the ppeople’s bbudget, the land tax reform, the tax increase, income tax, net of a system of national health service system, adjustment of agricultural policy. According to the economic theory of Keynes’s "State intervention in economic life", in a situation that the total social demand is less than aggregate supply, tax cuts will be advocated and increased government spending to stimulate economic growth, expansion of investment and consumption; aggregate demand is greater than the total supply advocated tax increases to reduce fiscal spending to reduce investment calendar to restrain economic growth and consumer. After World War Ⅱ, the British economy is showing slow development momentum. So, the British government, in order to develop the economy, has tried to promote economic growth mainly through tax cuts and increased spending, debt, inflation and other measures. The realization of the system of personal income tax deduction is a major change in the history of the taxation developmentt. This change also has a positive role in promoting social stability and development in the U.K. But with the foundation and development of welfare state, the implementation of a comprehensive social security has brought a huge burden on the government. Government got serious fiscal and financial deficits especially in a period of economic decline. Under this welfare system, the ggovernment has taken too mmuch responsibility while the individual people became too dependent on welfare systems and reluctant to go to work, getting the economy in a staging situation. Another result was that many people do not need welfare enjoyed the benefits while those living below the poverty line can not enjoy the welfare supplied by the system. British welfare state policies has lots of flaws and made the British social policy in a potential situation of crisis.Chapter four discussed the impact of Margaret Thatcher’s privatization and tax reform on social justice. Margaret Thatcher and her Conservative Party influenced deeply by New Right reflected the social policies of the welfare state and put forward the slogan of "remodeling Britain", trying to get rid of the crisis of the social policy. Margaret Thatcher came to power at the beginning of active implementation of the privatization of social welfare reform, hoping to reduce government intervention in the field of social welfare, at the same time raised the selectivity principle "instead of the principle of universality, the social welfare can really help to the poor, rather than evenly distributed. Margaret Thatcher came to power, the implementation of a set of new economic strategy, trying to change the economic operation, to change the form and extent of the national market relations, will be a new economic ideology is injected into a wide range of economic and social life. Thatcher’s Conservative government, represented by the basic principle in the area of tax policy, through tax cuts and simplification of tax and increases in indirect taxes to reduce the burden on enterprises, reversing the post-war British society formed the so-called "dependency culture", the mobilization of enthusiasm and encourage individuals and businesses engaged in production activities. Since Margaret Thatcher took office in 1979, the British tax system carried out a series of large-scale reforms,1979,1984 and 1988 tax reform greatest impact. Can be seen from the proportion of the income tax of the total tax revenue in 1978 and 2000, the income tax the proportion was diminishing trend, the Thatcher government timely adjustment of the tax policy is always based on the domestic economic situation and the needs of the international economic competition. Such as the increase or decrease in the total tax revenue, change the tax rate, adjust the tariff lines, increase or reduce the allowance or threshold, to control inflation, the impact of consumer demand and the crisis cycle. However, the "poll tax" will no doubt significantly increase the burden on the lower classes. Her opposition Labor Party to engage in "Robin Hood," and engage in a "poll tax" like "robbing the poor to the rich" policy is unpopular. Therefore, the introduction of the tax policy has sparked strong protests, an important factor to cause her to step down in November of that year. However, Margaret Thatcher’s fiscal and tax policies and principles of the change marks the British welfare state a major transformation, the development of social policy entered a phase of reflection and 1990s British social policy reform and determine the direction.Chapter five discussedd the adjustment of the tax system which is influenced and guided by the "Third Way" thinking’s influence on social justice. The new Labor government by the combination of tax and social welfare policy, successfully achieved the interaction between the two, which both economic efficiency and social equity, and promoted the coordinated development of the economy and society of the United Kingdom. Blair believes that tax policy is the core issue of Third Way must maintain control of taxation, public expenditure amounts are ’used to be effective and for reform’. The theory advocates of the "Third Way" Giddens think, to seek social justice, the most important is that the size of the tax and how to spend the tax. In tax and expenditure policies, New Labor has changed the traditional tax-spending policy, will focus on the strict fiscal discipline and a balanced budget, to rectify the past that high progressive tax is to achieve a greater degree of equality the only way the concept of commitment to the implementation of the "prudent" and "stable" spending policies, did not use the traditional Labor government to increase taxes and spending way to achieve welfare goals, while reducing the tax burden on low-income and even lower deposit tax raise the inheritance tax incomes starting point to promote the coordinated development of economic and social stability. Blair’s government to avoid commitment to increased medical and teaching reform and investment through tax increases, but as far as possible to promote economic growth by raising labor productivity approach, increasing household income, in order to honor the general election, it is wholeheartedly endorsed. The New Labour government has borrowed from the practice of the United States, the combined tax and social welfare policy, not only simplifies the operation of the program, and more conducive to the promotion of employment and the elimination of the dual goals of poverty.Seen from the development of British tax system, taxation and its influence on social justice is clear. After hundred years’ gradual development, the temporary, exploratory taxation system evolved to more stable, regular system in U.K. During this process, the degree of social justice was also gradually improved.We can see, through the study of the evolution of the tax system in the United Kingdom and the history of British’s rise and fall, continuely economic growth need system guarteenn and the appropriate policy coordination. To build a harmonious society, China could learn some lessons from Britain’s experiences which include:building a sound tax system; promoting employment, improving the security co-ordination, narrowing the income gap at the same time of stressing efficiency.