Chapter 40: National Development Level, Prices!

In no time, the draft personal tax plan is complete.

The personal exemption limit is 693, for those with an annual income of more than 1,387 and less than 13,871, it is 3%.

For those with an income between 13,871 and 27,742, it is 7%, and so on in seven levels.

The higher the income, the higher the tax rate.

Next comes tax legislation for businesses and corporations.

When it comes to business, Chen Yang has adopted a very strict approach, following the standards of developed countries.

His central idea is that whoever earns more, pays more, with a certain sense of wealth redistribution.

Income distribution will have a significant impact in the long term, with the main objective of reducing wealth disparities.

And this income distribution, if not implemented from the beginning, will be practically impossible to change later.

So even though Chen Yang is aware that high tax rates can bring serious problems, such as foreign investment hesitancy and certain companies' lack of consideration for production and assembly in the country.

But that wasn't even in Chen Yang's plans.

In situations where there is a choice, companies will certainly prefer to move manufacturing to countries with lower labor costs.

Even though tax rates are a little higher than in the home country, the low labor costs are enough to make up the difference, and even generate a profit.

However, Chen Yang never considered the possibility of attracting foreign capital to the manufacturing stage, that is, you can come, but whether you can accept the high labor costs, that is your problem.

Cheap labor only serves to increase income disparity and generate social conflicts.

In his nation-building plan, the true primary industry was not manufacturing, nor labor-intensive industry, but independent innovation.

Whether it was textile factories or fishing, the goal was just to boost the population.

Once the textile factories were built, he could easily attract foreign capital to take them over, but he did not do so. Instead, he opened the textile factories in Yan Guo's name.

Textile factories that are owned by Yan Guo itself, although they are also manufacturing, can offer more benefits to employees and provide better treatments.

With the continued growth of Yan Guo's economy, ordinary workers can also enjoy the benefits of economic growth.

It doesn't mean that developed countries don't have cutting-edge manufacturing, of course they do, just that the profit is not as high as building factories abroad.

This is why many people envy the blue collars in developed countries.

Even though they are manual workers, the life of blue collars in developed countries is more dignified.

They have weekly days off, many national holidays, full social benefits, enough income to support their families, and stable employment contracts, which means companies cannot easily fire them.

For the same work, they live better.

The factory rules in Yan City were like this.

A country cannot fail to have common manufacturing. Without this type of labor-intensive industry, it means there are not enough people and society will be in trouble.

But the quality of life of ordinary manufacturing workers mainly depends on the country's level of development.

Therefore, the negative impact of high tax in this aspect is not a problem for Chen Yang.

On the contrary, with high taxes, the country can function normally and invest in social benefits.

The tax law was being improved gradually, while time passed quickly.

After defining the basic structure of the tax law, Chen Yang purchased ten robots and handed the rest of the work over to them.

Fundraising was not yet urgent. With the tax law defined, funding could be carried out simultaneously.

The next step to be considered was the price of the goods.

In general, high taxes lead to high prices, average taxes to average prices, and low taxes to low prices.

However, this is for general reference only. The price of goods depends on the category, the quantity of imports, the wealth of natural resources and productivity.

At present, Yan Guo Nation only has one city, but its seed and fertilizer technology can be said to be the best in the world. Furthermore, it is in the process of mechanization and industrialization of agricultural production, with sufficient production to meet the city's daily needs.

With high efficiency and low costs, staple food prices should not be too high.

The same applies to livestock farming. The breeding, slaughtering and processing of farmed animals is highly automated, spreading costs and allowing prices to be low.

Not to mention the future, just in the present, the prices of agricultural products can be said to be lower than in China.

Chen Yang suddenly regretted a little that he had focused on attracting people and only considered prices when he realized the benefits of industrial development.

He thought he had thought of every aspect, but there were still many details he hadn't considered, some problems only emerged when he encountered them.

Good thing it was just one city, so there was enough margin for error.

In addition to industrial products, there was fishing.

Living close to the sea, seafood production was sufficient to meet demand.

In many coastal cities, seafood was cheap, there was no way around it, production was greater than demand, and without counting shipping, the price naturally dropped.

The price of some light industry products could also be reduced, this type of product did not have a monopoly, whoever offered the lowest price would be bought, even considering shipping and labor, the price would not be too high.

As for electronic technology products, it was even simpler, exempt taxes, reduce value added tax, I didn't expect to make money from it, just a small profit.

If an outsider really guessed that Chen Yang had a conglomerate behind him, that conglomerate would throw everything up when they saw the prices he had set.

What the hell profit, is that charity?

There was nothing to do, since he was focusing on long-term development, the short-term profit margin would necessarily be small.

Being able to not make a loss and even make some profit was already very good, who needs a bicycle?

With the basic prices defined, the next step was the price of properties.