A Research On Structural Design And Levy Mechanism For Personal Income Tax

The levy of the personal income tax began in our country in 1980. At the beginning of the levy, the revenue of the personal income tax is extremely limited because the level of Chinese income is low. However, the personal income tax has displayed the strong growth tendency since the tax system reform in 1994. The functions of the personal income tax that is collecting financial revenue and adjusting income distribution also appear day by day.However, behind the revenue of the personal income tax rapid growth, the drawbacks of present tax system structure also gradually come out. These mainly embody in two aspects:one is that the function of adjusting income distribution is not sufficient because of faults in exemption, tax rank and tax rate, the other is that evading tax seriously because of supervising deficiency. These questions and drawbacks have encouraged many disputes in the society and academic members. The central government pays much attention to the tax system reform and fully emphasizes the necessity of the construction of scientific finance and taxation system. Under this kind of background, the optimal structure designing urgency to the personal income tax that performs the important function that regulates income order appears more prominent.Associated with the personal income tax levy reality in our country and present representative research results, this article has used massive quantitative economics research methods to discuss the tax system structural design question from several aspects such as the exemption of personal income tax, tax rank, tax rate establishment and tax levy.Conclusions obtained from this article lie in several following aspects:Firstly, the article confirms that personal income tax will still maintain growth at a high speed in a short-term in our country in view of present situation. It will be helpful to play a more powerful role for the personal income tax in collecting financial revenue and adjustment to income distribution. Since the tax system reform, the personal income tax has experienced from one negative process to positive process in adjusting income differential aspect But dynamics is not powerful. Whereas, in the progressive degree, the personal income tax displays the tendency that progressiveness drops gradually. This will be conducive to manifest the support for the efficiency to some degree.Secondly, About the focal point on how to design the exemption of wages and salary income tax, we may consider from three standards:firstly, on the basis of the income distribution density function reckoning method the government can take the adjustment into account in the finance reducing light to verify whether the adjustment scope can be accepted or not; secondly, this article has pointed out the necessity of exemption design regionalization and given a design proposal based on minimal wage standard in order to alleviate the influence of difference in regional economic development; Thirdly, this article has given respective exemption indexation design proposals about different social strata in order to avoid the consequence of CPI fluctuation so that we can vanquish the impact of price level on incidence of taxation of non-identical income hierarchy.Thirdly, this article discusses on how to establish the tax rank and design the tax rate. This article has pointed out the tax ranks since the fifth play an unimportant role which are not worthy of mentioning in the entire tax ranks. According to the above, this article has proposed two tentative plans to improve tax rank establishment. As for tax rate, this article has derived the parameter theoretical value of linear income tax model and given a method how it should be combined with the reality (using investigation data of city residents). In view of the fact that in our country nine progressive non-linear tax ranks reality, the article has proposed basic thread of tax rank establishment, given a tax rank climbing plan for wage tax, and confirmed this plan rational from the empirical angle.Lastly, making use of DEA method, this article has constructed the efficiency frontier surface of our country's personal income tax levy quite high in recent years under the existing condition. Subsequently, this article has analyzed the government, the taxpayer and the tax office strategy choice in the different situation from game theory and information economics angle. This article has pointed out keeping maintaining high pressure is an inevitable choice to evade tax in any situation. The government must let tax office undertake a part of taxation risk in order to make tax office work according to the government intention.