Hoping for tax-free royalties

Conventional wisdom holds that Chinese literature is in a sad state. Publishers are looking to make a quick buck by getting on the bandwagon of whatever's popular at the moment, and author "brands" fill the bestseller lists while true literary authors can't make a living writing quality fiction. This assessment comes from domestic writers (such as Ah Cheng) and foreign critics (such as Wolfgang Kubin) alike, so it must be true.

How can this decline be reversed? NPC delegate Ling Jiefang, who wrote a series of historical epics under the pen name Er Yue He, thinks he has the solution: don't make writers pay taxes.

Er Yue He said, "If authors were tax-exempt, if they were not tax on income from their writing, this would be enough to stimulate their creativity." He added that there are not all that many writers anyway—even among the members of the Chinese Writers' Association, there are relatively few who are on the front lines and truly engaged in creative work. Their total tax contribution is small enough that were they to be exempt, it would not have much of a negative effect on the development of China's economy. Er Yue He brought up another way to address China's lack of cultural innovation. He suggested setting up China's own Nobel prize, not to create a personality cult, but because a purse fat enough to support a writer for life, combined with competition for a high honor, would motivate authors in their work.

The same report in The Beijing News quoted novelist Bei Cun, who was of the opinion that if taxes on royalties could not be eliminated entirely, a token amount would be sufficient.

Not everyone agreed. Yu Hua, author of Brothers and To Live, took issue with the idea that tax incentives would spur creativity:

Yu Hua said that there's no binding relationship between writing and taxes; paying tax is every citizen's responsibility. "If the state gives writers more money, or if it exempts them from paying taxes, they won't necessarily produce better work." Yu Hua said that China's tax structure for writers could be termed "deferential." He explained that he pays a 13% tax on works published in China, but 33-34% on translations of his works published in Europe and the USA. "Besides, writers who pay a lot in taxes have a high income, so they shouldn't be the ones asking for tax relief. If you exempt all writers from taxes, then you should do the same for teachers, blue-collar workers, and civil servants."

And Yan Lianke, author of A Dream of Ding Village, said that authors have no special rights. "Lots of people who are worse off than writers, like farmers who rise at the crack of dawn to go into the city to sell vegetables, or who slave away selling fried dough, still have to pay taxes."

As for Er Yue He's "Chinese Nobel," poet Muji, writing in The Beijing News, pointed out that China is certainly not hurting for literary prizes. It's just that they don't get much respect.

The Seventh Mao Dun Prize, which just publicized nominations at the end of February, drew attention not so much for the names that made the list as for the fact that Yu Hua was left off. His publisher subsequently denied rumors that it failed to nominate Brothers because it felt the novel was a weak effort, and a representative emerged to say that he had simply remembered wrong—Yu Hua really was on the list.

And there are enough stories about back-room politicking surrounding the Mao Dun Prize and other literary prizes to suggest that even if a new prize came along with a fatter purse, it would not necessary be any more of an honor.

Er Yue He's concerns were not solely for China's authors; he also worried that the high price of books prevents cultural development:

Er Yue He said that a low tax bracket should be implemented for publishers of pure literature and culture. Using his own experience as an example, he noted that the hardcover edition of his major works runs to more than 500 yuan a set, or up to 700 for a boxed set. Even paperbacks are around 300 yuan or so. He said, "Think about it: some readers, such as low-income families, urban poor, and middle school students can't afford this. When people who want to read your books can't afford them, it's pretty disheartening to a writer." He said that if the country created this opening—if it reduced or eliminated taxes on writers and publishers—then book prices would drop. As a result, the intractable bootleg industry would become high-risk and low-profit, so book pirates might even go legit and contribute to the healthy operation of the cultural environment.

GAPP's Liu Binjie agrees that book prices are too high. Liu spoke to reporters yesterday about textbook publishing and the price of books in general, suggesting that the Administration may implement a pricing system to protect the public from price gouging. This system would calculate an appropriate price based on the cost of materials, labor, and distribution.