The Effect Analysis And System Design Of China's Income Tax

Originated from the western countries, the income tax holds an important position in China's tax system and plays an essential role in revenue, income distribution regulation and resources allocation. It is undoubtedly of great theoretical and practical significance to analyze the economic effect of income tax and identify the reality conditioning factors on China's income tax system design by combining the western income tax theory with China's actual situation and thereafter to put forward China's income tax system design.Hence, the thesis adopts it as the subject of the study, and is divided into two parts. The first part (including Chapter Two and Chapter Three) is devoted to the effect analysis of China's income tax with the focus on the economic effect of China's current personal income tax and enterprise income tax, following the logic thread: the western income tax theory-possible limitations of the application of the western theory in China-the effect analysis of China's current income tax. The second part (including Chapter Four, Chapter Five and Chapter Six) discusses China's income tax system design. Based on the analysis in the first part, the conditioning factors on China's tax system design are identified here, and designs of China's personal income tax system and enterprise income tax system are put forward respectively.The effect analysis of China's income tax starts from the gap between the prerequisite of the western income tax theory and China's actual situation, while the income tax system design from the reality conditioning China's income taxation. In this sense, the thesis has its creativity and originality, which can also be found in the following aspects:1.The thesis begins with the analysis of gap between China's actual situation and the prerequisite of the western income tax theory in terms of the effect on labor forces supply from such aspects as dual economic structure, system transition etc. The factors influencing the effect of China's income tax on labor forces supply are examined at length with a conclusion drawn that is the efficiency loss is not the major problem in the current period of China. Then the thesis takes different views to probe into the issue of fairness in China's personal income tax and points out currently the major problem with China's personal income tax lies in the horizontal unfairness that is reflected on the different tax burderns among salaried persons and between the salariat and the non-salariat due to the system factor. The taxation policies of housing accumulation fund, endowment insuranceand hospitalization insurance are taken as the example to examine the issue of unfairness resulted from China's personal income tax.2.The thesis explores the restrictions set by China's current income tax on enterprises' investment and financing from the aspects of financial markets and investment and financing polices, and argues that great influences of system factor on China's enterprises' investment and financing cannot be ignored when the western income tax theory is applied to analyze the economic effect of China's enterprise income tax. The enterprises are classified into three types here, namely, state-owned enterprise, private-owned enterprise and wholly foreign-owned enterprise, according to different share holding structures, enterprise governance and external system environments. The influence of enterprise income tax on the capital structures and investment activities of these three types of enterprises are examined in details.3.Based on the effect analysis of China's income tax, the thesis discusses the reality conditioning the income tax system design and holds that the conditioning factors on China's income tax system design are three-fold: firstly, the current level of productivity and dual economy lead to the limited coverage of income taxation; secondly, the factor of system results in great taxation differences among individuals and different enterprises, which should be taken into full consideration when the income taxation policy is...