The Model Of The Incentive Relation Of China Pension System And Individual Income Tax

China's high savings rate, the over-huge operation gap of China's pension funding and serious loss of individual income tax status have always been focused by researchers home and aboard for many years. Based on the problems above, this paper discusses the unsound connection between high saving rate status and pension system in detail. From the aspect of individual income tax paying, it also puts forward a new direction of the research on the incentive relation of pension system and individual income tax to stimulate the coordinated growth of China's pension and individual income tax paying. With great evolution on China's pension system according to China's domestic situation, this paper gets its own significant practical and theoretical value by hitting the hot topic.This paper consists of seven parts. Firstly, it reviews the pension funding and individual income tax theories, and then points out the questions on the base of the analysis of actual environment and reasons of our research, and provides the research route and content. Secondly, the thesis analyses the reason of China's high savings rate, the main problems of China's pension fund-raising mode operation and the serious loss of individual income tax by using market statistics. It also brings forward its exploring direction with contacting the pension fund and individual income tax paying. Thirdly, it meticulously analyses pension system and tax incentive mechanism of America, Japan, Singapore and Austria to explore an approach to combine China's pension system with individual income tax's paying. Fourthly, it designs the actuarial model of the combination referring to different actuarial models of pension financing research home and aboard. Fifthly, according to the nine-grade-tax-rate way of individual income tax, all the wages are graded into nine rates in the model, while the income of non-wage earners are graded into five rates. And the transfered percentage into individual pension account depends on the individual income grade. In Chapter Six, according to the relevant policies implemented in our country, the paper quantitatively analyses how wage levels and its'growth rates, how pension accumulated rate and how retire age impact upon the replacement rate of individual pension account based on the incentive relation between individual account pension and individual income tax to test the feasibility of the actuarial model.In Chapter Seven, it points out the essential problems in carrying out the actuarial model and makes recommendations on relevant policies.The originality of this paper is reflected in the following aspects:(1) With respect to Chinese domestic situation of high saving rates, over-huge operation gap of China's pension funding and serious individual income tax loss, the thesis proposes a new idea of transferring certain proportion of individual income tax into individual pension accounts. It creatively combines individual pension accounts with individual income tax incentively together. (2)It designs the stimulating actuarial model of the incentive relation of individual pension account and individual income tax. And To fit into the actual condition of China, according to new social pension policies of 2005 and the individual income tax law, it distinguishes proportions of transferring from individual income tax into individual pension accounts differently by wage earners and non-waged earners, the feasibility of measurement from the perspective of replacement rate is also measured and calculated. (3)According to the principles of simulation, we also presented quantitative analysis of how wage levels and its growth rates, how pension accumulated rate and how retirement age impact upon the individual account replacement rates in the incentive actuarial model of pension and individual income tax.This paper provides a new approach for expanding social pension financing and a new idea to improve the enthusiasm of taxpayers to pay their individual income tax and lays a foundation for further study on how to consolidate individual pension account as well.