Social Insurance Fund Financing: Study On The Mode Of Combination Of Its Tax And Expense

Financing of Social Insurance Fund is the first step of the Fund Management and plays an important role in realizing the balance of the Social Insurance Fund. And it also gets the options of financing mode and fashion involved. There exist three schemes of the fund financing mode - pay-as-you-go, funding and partial funding while China is implementing the combination of partial funding (social plan as a whole) and the individual accounts. And there also exist two schemes of the fund financing fashion -collection of social insurance tax (or social security tax) as well as social insurance expense while China is conducting the latter.This papers, starting from the negative effects caused by the collection of social insurance tax, analyzing the commonness and difference between the insurance expense and tax, affiliating China's Social Insurance Fund Financing mode, draws the conclusion (based on the study from the analysis on both from theory and practice) that fund financing in China needs to introduce the combination of insurance Tax and Expense. Insurance funds paid by units or enterprises needs to be transferred from Expense to Tax to be social plan as a whole while the portion paid by individuals keeps on the individual accounts. Furthermore, this paper also designs the mode of Expense and Tax combination and provides the suited measurements.