Research On The Standard Of Tax Deducting Income From Wages And Salaries

Taxation on personal income should fully embody the equity principle of taxation and the amount of money deducted from the income is the foundation of income distribution. Although adjusted for several times, the deficiency of present taxation of personal income, for example expense deduction, tax bases, tax rates, tax model choices, tax policies, regulation of and tax administration, has still been existing in China and needs improving. On the basis of the equity principle of taxation as well as borrowing the successful experience from foreign taxation systems, this thesis focuses on the problem of standards of the expense deduction from the income from wages and salaries. The author makes an attempt to reconstruct the standards of deducting personal income in China.The following research approaches were adopted throughout the writing process of this thesis:Both practical and normative approaches were combined to support and evidence the viewpoints of this thesis besides analysis of statistical data .This thesis mainly consists of five chapters: first introduces the situation of the increase in taxing personal income and the income distribution, some problems and methods, research On The Standard Of Tax Deducting Income From Wages And Salaries, some conclusions are drawn .The present single standard of expense deduction isn't applicable to tax payers, and thus more feasible principles should be taken into consideration to suit differing conditions in terms of locality, time and persons involved. The present ways of taxing personal income individually should be altered to tax by the month, and the specific contents should be clearly included in the expense deduction. As a consequence, not only the ability of tax bearing can be reflected in expense deduction, but also the standard of economic development and welfare policy of the country can be embodied as well. It's urgent to reform taxation system.Innovations of the study: build a simple model for expense deduction.After building the model, the author tested and evaluated it using the statistics of 2005 and tax deductions from all provinces. Results show that the model can objectively reflect the real situation in China and thus it is workable and practical comparing with other foreign models. It is easy to understand and applicable, so more cost of taxing can be saved. As a consequence, it fully embodies the efficiency principle as well as the equity principle of taxation as many elements, such as consumptive expenses, additional deductions and price index, are included in the model..