now is the time for adjusting the policy.” Research from the World Bank indicates that while inequality of income can be inevitable at certain stages of development, inequality of opportunity will undermine long-term development prospects. In order to enhance growth and fight poverty, it will therefore be important to improve access to basic education, especially in poor rural areas. Fiscal policy reform China already has a tax and redistribution system. It is divided into 9 income groups. The first bracket for salaries exceeding 800 yuan (or US$96.4) is taxed at 5%, the last bracket for incomes exceeding 100,000 yuan (or US$12,000) is taxed at 45%. There is also a tax system for craftsmen. This one is based on 5 tranches and not 9. The highest rate is 35%. However, it seems that this tax system cannot really be effective in reducing inequalities. This is for several reasons. China faces significant corruption problems that make this tax system illegitimate and difficult to enforce. Tax payers consider that the taxes they pay will go to a privileged minority, which is why, in practice, this tax system is not legitimate. Corruption is already a major issue for China. According to a study, 50% of state-owned companies, 60% of joint venture companies and 100% of craftsmen practice tax evasion in China. In the 1980s, commercial and industrial evasion increased considerably to reach 100 billion yuan in 1989, or about 10% of national income. Income tax evasion reached 95%, according to Ministry of Security sources between 1985 and 1988 there were 8900 cases of tax revolt, 1500 tax inspectors were injured, 872 were in critical condition, 28 were disabled, and 4 died. During the first six months of 1990, there were 1352 cases of tax revolts, 1047 tax inspectors injured, 127 critically ill and disabled, and 3 dead. In 1992 and 1993, there were 2744 and 2967 violent events against payment of taxes respectively. See also Poverty in China Economy of China Education in China Social issues in China Income tax in China Further reading References Income distribution Income in China Economic inequality China