The Legislative Design Of The Future Inheritance Tax Law In China

With the development of economy and society, polarization has appeared in the individual income distribution. On one hand, excessive fortune flows to the hands the rich, on the other hand, the poor can't live a standard life, the gap between the rich and the poor is larger and larger, thus inheritance tax is necessary. Before the issue of Inheritance Tax Law, necessity and availability to collect inheritance tax are the focuses among the scholars, which is the only superficial problem in terms of the design of the law, while systematic and complete theories on the concrete items are far from satisfaction. By way of comparative study among countries, including Taiwan, the thesis focuses on the design of the main items of the future inheritance tax law in China.The introductory part is about inheritance law, briefing on necessity and availability to collect inheritance law in China. In terms of necessity, inheritance law helps adjust the allocation, which avoids excessive concentration of fortune and relieves the conflict between the rich and the poor; helps have a sound system of tax collection and increase governmental revenue; helps maintain national sovereignty and profit; helps encourage people to get rich via diligence, enhance public awareness and stabilize the society. In terms of availability, well-paid class and relative concentration of individual fortune are the basic essentials to set up the policy of collecting inheritance tax; the issue and execution of the civil laws, such as Property Law, Marriage Law and Inheritance Law offer sound environment to set up the policy of collecting inheritance law; the more-than-400-year history of collecting inheritance law in more than 100 countries provide rich experience for us and a set of administrative ways to collect tax since 1994 is the base to collect tax.The thesis is divided into four parts:The first part is about the basic principle of the future Inheritance Tax Law in China. Fairness is one of them, which is important to create a fair environment to compete. Tax is collected according to profit and ability. The policy of inheritance law must be designed to benefit tax-payers. Taxation is regulated by individual ability, which fully exhibits the principle that the able pay more, the less able pays less and the unable don't pay. Efficiency is another principle, which is realized via collecting tax, including enhancement of allocation of resources and decrease of inefficiency. The inheritance tax law in China aims at replacement of the social fortune. The payment of inheritance tax is re-allocated in the society, inclined to the lower class, the resources from inheritance could be effectively allocated under the market mechanism and it could also manipulate the macro-economy and decrease inefficiency. Convenience is the third principle, which means tax collecting and its consequent administrative regulations must be concise in order to make taxpayer convenient. Stability is the fourth principle, i.e. inheritance taxation could strengthen the intervention on the macro-economy, decrease the fluctuation of the economy and then realize its stability. Distinction is the last one. When collecting the inheritance tax, tax payers must be treated in a different and reasonable way.The second part is about the modes of inheritance taxation. In the first place, the international modes of inheritance taxation are analyzed. Based on the different situation of different states, the policy of taxation is categorized into three groups, including general inheritance law, divided inheritance law and mixed inheritance law, all of which have its own pros and cons. Furthermore, based on the pros and cons of international modes and the national situation, a conclusion is reached that general inheritance law is appropriate in China, because the mixed type is not with the principles of fairness and efficiency and the divided type is not with the principle of convenience, only the general type is to levy the total property of the inherited once, which is to easy to execute and fully conform to the principle of efficiency, the tendency of global taxation and the general idea on reform of Chinese taxation system.Part Three is about the main items of the future Inheritance Tax Law. Based on the inheritance tax law at international and regional level, taxpayer in China should be decided according to the international standard and the origin standard. To be specific, the Chinese citizens, together with the non-Chinese citizens who have domicile or successively live in China over a certain period, are labeled as nonrestrictive tax payers, to whom taxes on their property home and abroad are levied. When non-Chinese citizens and the ones who have no domicile and don't live in China for a certain successive period are dead, taxes are only levied on their property in China. The range of inheritance tax should be set to be the total amount of inheritance conforming to the regulation of Succession Law and the mode of general inheritance law. The tax rate is ranged into five grades with ten percent each; the highest marginal rate is 50%. The excess progressive tax rate with five grades ranging from 10% to 50% is fit for the inheritance tax rate in China.Part Four is about the problem and solution when collecting the inheritance tax. The problems are that the system on the supervision on personal property and evaluation of inheritance is not sound and tax evasion is not avoidable. The above mentioned problems could be solved after establishing and improving the systems of application of personal property and income, of registration of personal property and of evaluation of personal property including inheritance and collecting gift tax.In sum, inheritance tax, as an international tax, helps adjust the allocation of social fortune, relieve the gap between the rich and the poor, encourage public donation, restrict the behavior of reaping without efforts and promote the harmonious development. Simultaneously, it helps implement the international equivalent principle, maintain national tax sovereignty, improve tax system in China and realize the social stability and fair and just goal.