China has realised that tax evasion has a direct cost on ordinary people. The China Daily reported today that:

Cutting taxes for low-income earners and fighting tax evasion by the rich. That will be the formula for narrowing the wealth gap, the country's top tax official said yesterday.

"We will promote equity and social justice by making better use of taxation in adjusting income distribution," said Xie Xuren, commissioner of the State Administration of Taxation (SAT).

"We will reduce the tax burden on low- and medium-income earners, but will redouble efforts in collecting tax from high income earners," he told a press conference organized by the State Information Office.

There's no need to guess the biggest problem that China faces. It's offshore. The British Virgin Islands is selling offshore companies with debit cards attached to rich Chinese faster than they can run the certificates of incorporation off the word processor. As ever, it's ordinary people that pay for this crime by the rich.

Perhaps China should send a gunboat.