Research On The Model Of Personal Income Tax System In China

At the beginning of reform and opening up,personal income tax in China has played a vital role in organizing fiscal revenue,adjusting the gap of income distribution and regulating macroeconomic operation.However,with the development of economic and social situation in China,the external environment that affected the personal income tax system has also changed dramatically,the current classified income tax system has been unable to meet the actual need of China at present,the voice of reforming the current personal income tax system in China is becoming higher and higher,this has not only related to the reform of a specific element,but stepped into the comprehensive and holistic reform stage,in which the transformation of the tax system model is the premise of the reform of personal income tax system in China,and also is the focus of this study.From the current situation,there are many drawbacks of the current classified income tax system in China,such as the unreasonable design of the cost deduction criteria and tax rate,tax collection and management means behind and so on,resulting in the serious lack on realizing the social equity and adjusting the gap of the income distribution.Although much trial and effort has been tried by our government,since the mid of the 90s of the 20th century to two sessions held on March 2018,the transformation of the personal income tax system model is all clearly as an important part of the tax system reform,moreover,the academia has also made the extensive discussion,but the transformation of the personal income tax system model from the theory to practice in China has not been substantial progress,the core issue is that the choice of the personal income tax system mode in China,although the direction is clear,there are some flaws such as the vague concept explanation and the lack of practical guidance.In view of this,it is very urgent to speed up the transformation of the personal income tax system model and implement the combination of comprehensive and classified income tax system,more precisely,that is the quasi-multilevel comprehensive income tax system,in order to further optimize the personal income tax system and the tax collection management system in China.On the basis of the research results of domestic and foreign experts and scholars,this paper starts from the relationship between taxable income about the personal income tax and personal income tax system model,and through the theoretical analysis of the basic model of personal income tax system,this paper summarizes the factors that have an impact on the development and change of personal income tax system model,at the same time,combine with the level of economic development,tax policy objectives and the status quo of tax collection management in China,with the use of analysis method of econometric model,explore the personal income tax model suitable for national condition in China.It is concluded that the combination of comprehensive and classified income tax system(the quasi-multilevel comprehensive income tax system)is the realistic choice most suitable for Chinese economic and social development.The details are as follows:Chapter 1:Introduction.From the perspective of studying the personal income tax system mode,emphasize the background and significance of this paper.On this basis,summarize the existing research results both at home and abroad from three aspects:the basic theory of the personal income tax system mode,the influencing factor on the selection of the tax system mode and the choice and design of the personal income tax system mode in China.And then put forward to the research idea and analytical method of this paper,and illustrate the innovation and shortcomings of this paper.Chapter 2:The relationship between taxable income about the personal income tax and personal income tax system model.To study the personal income tax model,the primary task is to clarify the relationship between taxable income about the personal income tax and personal income tax system model.Based on such judgment,this chapter starts from the point of view about "source of income" theory and "net appreciation"theory,and defines the taxable scope of taxable income.Then,on the basis of the theory,the taxable income is defined as the taxable income under the classification method and the taxable income under the comprehensive method,and elaborate the specific types of the taxable income under the two method.Under the background of basic theory,explore the relationship between the nature of taxable income and the personal income tax system mode.It concludes that neither the concept of taxable income about " source of income"theory can be considered as the basis of the classified income tax system,nor the concept of taxable income about "net appreciation"theory can be considered as the basis of the comprehensive income tax system.However,from the perspective of the theory and historical development,it is undeniable that there is indeed the certain connection between the two pairs.Chapter 3:The basic models of personal income tax system.This chapter mainly discusses the basic models of personal income tax system from the theoretical level.Based on the new perspective of the tax type of element pay,it is considered that the basic models of personal income tax system are divided into classified income tax system,comprehensive income tax system and mixed income tax system,and elaborate the basic content and main characteristic of the three models of personal income tax system respectively.Through collecting,excerpting,translating and arranging the information,this chapter sets Europe,Latin America,Africa,Asia,Oceania and North America as the divided area,and studies the status quo and evolution history of the current personal income tax system model around the world.Chapter 4:Influencing factors of the development and change of personal income tax system model.On the basis of theoretical analysis,this chapter analyzes the factors that affect the development and change of personal income tax system model,including the level of economic development,tax policy objectives,tax collection management and other non-economic factors.Subsequently,analyze the general law which affects the development and change of the personal income tax system model from the three factors of the level of economic development,tax policy objectives and tax collection management.Judging from the level of economic development,with the increase in the level of industrialization,element pay has evolved from a one-way flow to a multi-directional flow,and the personal income tax system model has evolved from the classified income tax system to the comprehensive income tax system;With the increase in the level of internationalization,there is increased differences between capital mobility and labor mobility,and the personal income tax system model has shifted from the purely comprehensive income tax system to the quasi-comprehensive income tax system.From the perspective of tax policy objectives,If the main objective of tax policy is to maintain the political effectiveness of taxation or to achieve the effect of economic growth,the classified income tax system is more likely to be adopted in the selection of the personal income tax system model;If the main objective of the tax policy is to realize the effect of income distribution,the comprehensive income tax system is more inclined to implement in the choice of the personal income tax system model,and more precisely,the multi-level comprehensive income tax system.From the view of tax collection management,if it is more generous on various aspects of tax collection and administration,the classified income tax system is more inclined to adopt;If it is more stringent on various aspects of tax collection and administration,the comprehensive income tax system is more inclined to implement.On this basis,through the study of status quo and evolution history of the personal income tax system model around the world,summarize the general trajectory of the development and change of personal income tax system model.That is,the countries that collecting the personal income tax earlier generally adopt the classified income tax system,the countries that collecting the personal income tax later generally adopt the comprehensive income tax system or the mixed income tax system.Taking into account the impact of various factors,some countries that have implemented the classified income tax system have started to shift their tax system modes to the mixed income tax system or the comprehensive income tax system,and some countries that have evolved into the mixed income tax system have started to shift their tax system modes to the comprehensive income tax system.Based on the understanding of the general law and trajectorie of the development and change of the personal income tax system mode,this paper will use this as the criterion and experience for judging the mode of the personal income tax system that is suitable for national conditions in China.Chapter 5:The model of personal income tax system suitable for national conditions in China.Based on the general law of the development and change of the personal income tax system mode,this chapter explores the model of personal income tax system suitable for national conditions in China,mainly from the perspective of the level of economic development,the tax policy objectives and the tax collection management in China.First of all,from the perspective of the level of economic development in China,mainly from the perspective of the level of industrialization and internationalization,it is considered that China should implement the quasi-comprehensive income tax system.Secondly,from the perspective of the tax policy objectives in China,mainly from the perspective of the political effectiveness and the economic effect of taxation,analyze the impact of the current classified income tax system in China with the empirical method on economic growth and income distribution.The results show that the current classified income tax system in China is conducive to maintaining the target of the political effectiveness of taxation,and maintaining the stable economic growth(that is,the level of total social output),but it has limited capacity to play a role in regulating income distribution.Compared with the fiscal expenditure instruments or fiscal spending policies,its regulating ability is with a far cry.Therefore,it is considered that China should implement the quasi-multilevel comprehensive income tax system.Thirdly,from the perspective of the tax collection management in China,mainly explore the situation of tax collection management of the current classified income tax system in China and the choice of its tax system model from the four aspects of income payers,income earners,tax authorities and economic and social environment.Because the current classified income tax system in China has the defects of uneven level of income payers,poor tax awareness of income earners,weak monitoring power of tax sources in tax authorities,and imperfect economic and social environment,the mode of personal income tax system in China need to be changed urgently.However,the implementation of the comprehensive income tax system need to have higher economic and social conditions,all of these conditions are not fully met by the current level of the tax collection management in China.Therefore,it is considered that China should implement quasi-comprehensive income tax system.Based on the above analysis,combined with the national conditions,regions and other factors in China,the author believes that China should be the first implementation of the binary income tax system suitable for national conditions in China to make up for the defects of the classified income tax system,and then gradually expand the scope of the comprehensive income,eventually establish the more perfect combination of comprehensive and classified income tax system(the quasi-multilevel comprehensive income tax system).Chapter 6:The design of the quasi-multilevel comprehensive income tax system model in China.Mainly explore from the two aspects of the tax base and the tax rate.Firstly,from the perspective of the tax base,that is,personal taxable income.From the current status of economic and social development in China,the taxable income of personal income tax mainly includes:employment income,operating income,investment income,redistribution income and capital gain,and design the specific provision of all the taxable income in detail.Under the quasi-multilevel comprehensive income tax system in China,the vast majority of taxable income should be incorporated into the scope of the comprehensive taxation,and only a small number of individual taxable income should be incorporated into the scope of the classified taxation.That is,the taxable income from employment income,operating income and investment income will be mainly combined and taxed at the same excess-progressive tax rate.In addition,individual taxable income such as pension(annuity);dividends,bonuses and interest on savings deposit will be implemented separately tax.Secondly,from the perspective of the tax rate,in order to consistent with the principle of determining the tax base,on the design of the tax rate,respectively explore the tax rate design of the comprehensive collection part and the tax rate design of the classified collection part.For the design of the tax rate of the comprehensive collection part,the author proposes to adopt the five-level excess-progressive tax rate.For the design of the tax rate of the classified collection part,the author suggests that depending on the different type of the taxable income included in the scope of the classified collection part,adopt the design approach of the different tax rate,that is the excess-progressive tax rate combined with the proportion tax rate.The innovation of this paper is mainly reflected in:First,the innovation in the research perspective.The classification of the basic models of the personal income tax system is based on the tax type of element pay rather than the tax type of all the taxable income.To a certain extent,this research perspective has the research significance of tracing the source.Second,the innovative in the research idea.From the perspective of industrialization and internationalization of the level of economic development,analyze the general law of the evolution of the basic models of the personal income tax system in various countries in the world.This research idea breaks through the assertion by Sirven that“which model of the personal income tax system a country chooses is not necessarily linked to the level of economic development”.Third,the innovation in the research field.In examining the impact of the current classified income tax system on income distribution in China,consider the economic and financial expenditure factors in the econometric model.To a certain extent,it is beneficial to explore the economic and financial expenditure factors that affect income distribution under a more macro-analytical framework,breaking the thinking barriers on tax.Fourth,the innovation in collecting and analyzing data.Through the search of the data from China Statistical Yearbook,China Financial Yearbook and China Tax Yearbook,and using the trend analysis and calculation method of the relevant indicator data published on the official statistics,finance and tax websites,deduce the variable data of the econometric model with part of the missing years in order to get a more realistic regression results.