The Study Of Improvement On Tax Rate System Of Individual Income Tax Law In China

Tax rate system is an important part of Individual Income Tax, It has direct influence on the burden of taxpayer. From the successful experience of setting up tax rate of Individual Income Tax in America and Japan, we can see that the implement of Tax rate system not only has the functions of increasing revenue and regulating economy, but also has functions of regulating income distribution to promote social equity. The level of people's income and expenditure has both improved greatly since the reform and opening policy. However, little change has taken place to tax rate system of Individual Income Tax. Therefore, it results in weakening its functions of regulating income redistribution, and having side-effect on resource allocation, which go against principle of equity, efficiency and public welfare. As the rapid broadening of the income gap, more efforts should be done on the Tax rate system of Individual Income Tax. Giving full consideration to China's practical situation, we should improve the tax rate system of Individual Income Tax in the context of reforming the tax system of personal income tax. The measures should be taken from the following aspects:reducing progressions and height of Tax rate system; bringing in structure of progressive disappearance, and adjusting tax rate grades; considering factors of marriage and family in applying tax rate; integrating tax rate of income from labor and up-grading tax rate of unearned income; establishing stretch tax rate system.