China is a rising power in global economy today, but how did they get there? We all know that China has a booming production business with the millions of items being made in China today, but what about their government? Shouldn’t they grow in wealth just as their economy is doing? This is where the tax system comes into play. China’s revenue in 1997 brought in 823.4 billion in yuan, or a little over 123.5 billion in U.S. money, whereas the U.S. brought in about 1.75 billion that year. The majority of this revenue comes from a tax known as VAT, or Value Added Tax, representing a little over two fifths of the total revenue. This tax might seem foreign to you as it did me because the U.S. does not have the VAT. The VAT goes hand in hand with the booming production business in China, being levied at each stage of the production of a commodity. One of America’s most profitable tax is from products being bought, since our economy is one of consumption, unlike the economy of China. America’s tax system is more evenly spread although, having different types of taxes that bring in an even amount of income, China’s os much more one-sided.
To read more here is the link on the Taxation system of China
Here is the link for the Taxation system in the U.S.