A Comparative Study On The Legal Systems Of Individual Income Tax In China And The United States

Individual income tax is a tax levying on the personal income of any natural person taxpayers. The tax has such functions as to regulate the distribution of individual income, to bring more revenue and coordinate the development of the economy. The individual income tax should hold these primary principles including tax by law and fairness of taxation.The legal systems of individual income tax law in both China and the United States are an important part of their related legal systems of taxation. Originated in 1862, the US federal individual tax law has a history longer than a century. Many aspects of the US legal system are much well built and highly legalized. China's individual income tax law started at the times of the Republic of China. Yet it was just established by the end of last century, leaving many aspects still to perfect. The course of the developing and reforming of the US system is full of struggle and compromise among the three powers of legislating, administration and justice. Meanwhile, it reflected the American's advocating to the idea of governed by law and following the spirit of the constitutional governance. In China, the Individual Income Tax was levied on with easy and the legal system of the Individual Income Tax Law was established smoothly, and it is often based on government decrees. The strict enforcement of orders and prohibitions has fully reflected the leading idea of administration of our country and efficiency of the administrative governance.Individual income tax is levied on personal income. The two systems are different in understanding and paying attention to the individual or the income. The US system focus on the individual, thus their regulations and rules are based on human. Every aspect s of the law is aim at benefits of the taxpayers. China's system pays more attention to the income, so everything goes around the income.Both systems distinguish the residential taxpayers from non-residential taxpayers. While in the United States taxpayers have different filing statues, in China, it is unnecessary to have them for in China all taxpayers are equally treated in tax law field.China's system pays more attention on the income so that incomes are categorized much detailed and each kind of income is regarded respectively.The US individual tax is a unitary income tax, while China's is a scheduled one. This different lead to the fact that the tax rate in China seems higher while reallyrather low compared to that of the United States.The two legal systems are also different in tax returning. Compared to the US filing system, China relies mainly on withholding, which seems easy and efficiency while in actual fact result in alienated taxpayers from tax collectors, which offering more chance for tax evaders and tax dodgers.In a word, compared with the legal system of the US Federal Individual Income Tax, the legal system of the Individual Income Tax Law in China lacks the idea of regarding taxpayer as the center; all differences between the two legal systems are taken place thereof. To reform and improve the Individual Income Tax legal system in China, the primary task is to change the norm of "regard income as center" and get the norm of "take taxpayer as the center ", and then we should also adopt the tax system of the unitary income tax.