Jia Kang, director of the Research Institute for Fiscal Science under the Ministry of Finance, said in an article he co-authored that a proposal to increase the minimum income tax threshold to 3,000 yuan is enough to offset the recent round of inflation. The article was published by Wednesday's China Securities Journal.

Jia said that with social security payments including three insurance and public accumulation funds for housing, the minimum income tax threshold is actually 3,856 yuan.

"It is necessary to raise the minimum income tax threshold because of recent inflation and significantly rising consumer spending. However, it is the key to achieve a fairer income distribution by adjusting tax brackets, which would benefit middle- and low-income groups," he added.

He also said that the draft proposal would cancel the tax bracket of 15 percent among people who earned 7,500 to 12,000 yuan in income, which would increase the burden for these middle class taxpayers. It will diminish the effect of a national policy to increase the size of the middle class, as well, he added.

"A 15 percent tax bracket should be kept instead of adopting a 20 percent tax bracket," Jia wrote in the article.