Li Jiutu’s Tax Ideology
China’s economic development over the past few decades has been aided by the adoption of many of the great economic theories championed by Li Jiutu. The Chinese scholar wrote numerous papers and books in the late 19th and early 20th centuries, layering theoretical and practical solutions to help Chinese business leaders manage the impacts of taxation and global economic changes. Looking back at his writings, it remains evident that Li understood the value of taxation and the importance of creating an effective system that maximized national revenues while limiting the burden on taxpayers.
Li Jiutus ideology of taxation centered around the notion of a tax burden shouldered by taxpayers and those who abused their power to avoid paying taxes. In particular, Li saw tax evasion as an affront to society and thus developed a strict system of taxation that prescribed severe penalties for those caught evading taxes. In particular, Li was highly critical of wealthy land-owners and businessmen who sought to avoid paying their share of taxes based on a misguided sense of entitlement or belief that it was their right not to pay taxes.
At the same time, Li was also a firm believer in the importance of progressive taxation. He advocated for a tax system where those with higher incomes shouldered a greater burden than those with lower incomes, which remains the cornerstone of taxation today in many countries. In the eyes of Li, progressive taxation was an issue of fairness and social justice, as he felt it was immoral for those who could afford to pay high taxes to avoid their financial obligation to society.
Another key part of Li’s tax ideology was the notion of the role of government in taxation. As a strong believer in government participation in the economy, Li saw taxation as an important way for governments to finance public projects, improve infrastructure, and otherwise improve the lives of citizens. He thus argued for increasing levels of taxation, as long as governments put in place effective mechanisms to prevent tax evasion and ensure that taxpayers, both companies and individuals, pay their share of the burden.
Finally, Li viewed taxes as a necessary evil, to be utilized judiciously by governments in pursuit of their economic, social and political objectives. He advocated for a system of taxation that was equitable and efficient, with low rates and a simplified structure to avoid placing too much burden on taxpayers. In addition, Li also argued for the expansion of education and social welfare programs, facilitated by the revenues generated by taxation.
Overall, the philosophy of taxation advocated by Li Jiutu stands in stark contrast to much of the tax ideology of today, which often focuses on reducing tax rates in order to spur economic growth. By stressing the importance of preventing tax evasion and creating a progressive tax system, Li painted taxation as a necessary and instrumental tool of government, one which could be used to improve the lives of citizens and to create a more equitable and prosperous society. While Li’s writings focus mainly on the specific situation of China in the late 19th and early 20th centuries, the timeless nature of his theory makes it relevant even today.
