Comparative Study Of Individual Income Tax System

The current individual income tax system in China has been in force since 1980, in which the total nation's tax collection was less than RMB200, 000. With the development of the reform and opening-up and the promotion of the socialist market economy, the economic life and the structure of our economy have witnessed drastic change. At the same time, personal income has been increasing fast and individual income tax began to become one of those important tax sources of financial income. Compared with 1985, individual income tax in 1996 increased by 146.26 times, and the annual increasing rate reached 57.3%. From 1996-2000, the increasing rate went down a little, but still it remained an annual rate of 36.63% and is a kind of a fastest growing tax. Current individual income tax system exposed some problems during its being undertaken, the globalization of the world economy under the frame of WTO demands that we have to adjust our individual income system actively in accordance with our economy development situation.The present situation that we are facing some problems in the area of individual income tax system has severely restricted the arrangement of finance income, fair distribution of social wealth, and full development of the adjusting working of economy and is incompatible with the economic growth . This paper is to make an exploration of the situation of individual income source and try to find the disadvantages on adjusting the distribution of social wealth and on the effect. What's more, a comparison about the elements of individual income tax system between the USA and the Great Britain and several other countries from the aspects of tax pattern, taxpayer, design of tax rate. Available suggestions is to be made about the current individual income tax system based on the national situation and experience we learn from others in order that the system may play an more effective role in adjusting and improving tax effect as well as economy effect.