Even if the inheritance tax does help to narrow the wealth gap, it still will have a ripple effect. Chinese people have always valued their families and believe that a family's interests are more important than any individual's. This is different from the Western thinking. Therefore, it is a tradition to hand down wealth to the next generations. In previous decades, every time when there were rumors on the introduction of the inheritance tax, many rich people transferred their wealth to their children or sent it overseas. This could result from fear of being found to be wealthy and subsequently having to pay the inheritance tax. The consequent shrinkage in their investment and consumption is a bitter blow to China's economic development.

Yi Xianrong (Oriental Morning Post): Some economists have warned that the introduction of the inheritance tax would curb the growth of social wealth. It is because, if a person knows that his right to bequeath his fortune will be restricted, his will to work and deposit his earnings will be affected. As a result, his productivity will lessen, which will lead to a drop of personal income and impact on the growth of social wealth.

In a market economy, the primary distribution plays a decisive role in causing the wealth gap, while the redistribution can do little to change the situation. In this sense, even though the inheritance tax is adopted as a way to transfer wealth to the poor, it won't be of much use.

In today's China, the widening gap between the poor and the rich is a direct result of the inequality in the primary distribution of wealth.

Positive Step

Gao Peiyong (people.com.cn): Taxation is undoubtedly one of the means to increase fiscal revenue, but contributing revenue is not the only function of taxation. With social and economic development, the importance of these other functions is emerging, and they are becoming an inseparable part of the modern taxation system where every tax has a unique role to play. As far as the inheritance tax is concerned, it also helps to adjust the income distribution and narrow the rich-poor gap.

The countries and regions that have scrapped the inheritance tax have quite likely done so as the variance between the rich and the poor is no longer an issue. However, these countries and regions used the inheritance tax initially to help tackle the income gap problem. Therefore, when talking about the inheritance tax, we need to understand that it caters to the need of a specific period of economic and social development.

China is now challenged by an ever-expanding rich-poor gap. How to narrow the gap is now a priority facing the government. The inheritance tax is the right means to adjust the unequal income problem in the market economy.

Yang Tao (People's Daily Overseas Edition): China, now midway through industrialization, is plagued by various social problems. The inheritance tax, however, is able to ease some of these problems.

Introducing the inheritance tax on rich families sends a signal to the wealthy that they need to contribute to social stability and common prosperity. It also shows that the government has begun to take tangible measures to narrow the rich-poor gap.

Shu Shengxiang (hlj.rednet.cn): Some people argue that, since there is little transparency of individual financial data in China, it's still not time to levy the inheritance tax. But we have to ask, why is there a lack of transparency, and when will the situation change? As for the more than 100 countries and regions that have collected the inheritance tax, did their governments have an insight into every citizen's financial status when they first instituted the tax?

The underdeveloped individual financial information system is just one of the obstacles blocking the introduction of the inheritance tax, and we must try to settle the problem as soon as possible. We have already collected personal income tax, despite the pitfalls mentioned, why can't we levy the inheritance tax?

Apart from adding to the country's fiscal revenue, the inheritance tax would actually strengthen the sense of social responsibility of the wealthy. The introduction of the inheritance tax is a kind of policy guide, which tells the rich that the more wealth you possess, the more social responsibility you'll have to take. This tax will encourage the rich to donate more to society since they know they'll have to pay the inheritance tax. Thus, the gap between the rich and the poor can be further narrowed.

Kang Jin (Jiangnan Times): As a tool to redistribute social wealth, the inheritance tax is still irreplaceable. China's Gini Coefficient, a standard measure of a country's overall income inequality, now stands at 0.46, compared with the internationally recognized warning line of 0.4. The poorest 20 percent of the total population make up only 4.7 percent of the national income or consumer sales, while the richest 20 percent account for 50 percent in both categories. Thus, narrowing the wealth gap is now the focus of China's economic development. People are very irresponsible to insist that China should rule out the inheritance tax because some other countries and regions in the world have abolished it.