3 - Extracting Funds from the Peasants

Summary

It is the obligation of peasants to pay taxes to the state, to fulfill the state's procurement quotas for agricultural products, and to be responsible for the various fees and services stipulated in these regulations. Any other demands on peasants to give financial, material, and labor contributions gratis are illegal and peasants have the right reject them.

DESPITE this and similar regulations repeatedly issued by central agencies, peasant burdens continued to exceed their legal obligations. This chapter describes and analyzes just what the burden problem was. We make five major points: (1) Exactions were open-ended and often arbitrary; (2) excessive tax and fee burdens were a problem throughout most of the reform period and by all accounts rose over time; (3) taxes and fees were highly regressive both locally within townships and across the country; (4) the severity of burdens varied with the presence or absence of TVEs whose resources could be tapped to pay for services and development projects; and (5) tax burdens — their size, variability, and the often brutal collection methods – were a major source of peasant grievances.

Burdens have to be assessed against peasant incomes, hence, we begin with a brief discussion of this topic. Analysis is complicated by enormous intrarural disparities. In 1999, the per capita income of peasants nationwide was 2,210 yuan; it was 5,409 in rural Shanghai and 1,357 in Gansu.