Research On Legal Issues Of Pre-tax Deduction Of Individual Income Tax

As early as in 1748,Montesquieu in "THE SPIRIT OF THE LAWS " reminded of the power body:"There is nothing that wisdom and prudence should regulate more than the portion taken away from the subjects and the portion left to them." and emphasized that "If the state matches its fortune to that of individuals,the plenty of the individuals will soon make its fortune increase." Today,260 years later,China's focusing on the pre-tax deduction debate related with on individual income tax reform.However,data from official statistics or civil survey and injustices from the exist legal system or the current tax practices warn to us:a pre-tax deduction legality of the individual income tax system has to accept in-depth reform,faint measures only allow the poor become poorer and the rich get richer!The reform on the pre-tax deduction of individual income tax system involves many legal issues and systems which need "wisdom","cautious" to analyze and solve,not just concerning the individual income tax threshold.On basis of the other countries' legislation and practical experiences,combined with China's national conditions,this Paper analyses the legal value and legal principles of the individual income tax law according to our current situations.It puts forward a new model and ways on pre-tax deduction.IT focused on specific system analyses,including legislation system,law enforcement system and relief mechanism to realize the target of structural tax reform and regulate comprehensively the income distribution gap,reducing the tax burden on low-income people to ensure to meet the basic needs of all including material and spiritual needs,to decrease gradually taxes burden on different income such as levy amount,useful amount and basic amount.In a word,the author wishes it prevent serious social gap between rich and poor and defend social harmony and stability.The thesis is divided into four sections.The First part analysis four main legal values of the pre-tax deduction of the individual income tax law:the values of human rights,the value of public welfare,the value of justice and the value of efficiency.The values of human rights are the highest one.The pre-tax deduction system must be based on the value of human rights,including not only the right to subsistence and development, such as the constitutional right to human rights,but also the specific tax rights such as the right to a lighter tax burden and so on.The value of public welfare means a whole deduction on individual income tax should be given the public donation.The concerned reform must also focus on justice including substantial,procedural justice and formal justice.The efficiency value of the tax law requires minimizing the cost to get the largest tax revenues.The second part,in accordance with the basic principles of tax law and the specific principles of tax deduction,it rethinks our current pre-tax deduction and practice and analysis and research several major legal principles.In the area of tax deduction,the legal principle is guard,the principle of tax fairness is the goal,the principle of autonomy is conducive to the coordination relations between central and local tax power.The principle of minimum cost of living with non-tax guarantees human nature most basically. In this chapter,it put foreword a few new ideas:to protect the equity between hardworking income and non-hardworking income;to allow the provincial government the special deduction power of the range of 30%besides central government's "standard deduction";to regulate the minimum standard deduction for a living in China in 2009 should be 1,000 Yuan,the monthly standard deduction amounted to 2,500 Yuan,the annual standard deduction 30,000 Yuan(changed by the relevant index)The third part advises comprehensive tax deduction reform mainly from models and methods taking into China's national conditions and out of copying the U.S.approach.We should take a combination of mixed-mode long-term including classification deduction and comprehensive deduction;use normal family as the main unit with standard deduction amount of 60,000 Yuan;delete the same tax threshold and deduct by the taxpayers 'capability who have the right to choose the standard deduction or itemized deductions; retain and perfect tax agent systems and establish the universal reporting system with tax deduction by pay-per-view,monthly,quarterly and yearly;carry out non-discrimination measure regardless the nature of foreign capital.in the last Part,using the comparative study method,the author adopts foreign rules and practical experiences and design in detail China's pre-tax deduction system.First of all,it advises a clear definition of a tax deduction.Secondly,in order to perfect tax enforcement law,we should change the concepts of tax service,improve the tax mechanism as well as other supporting mechanisms;Finally,in order to broaden the legal and non-legal relief measures such as administrative,judicature and social relieves and so on,it asks for protection of taxpayer rights,severe punishment crimes and safeguard the good order of the tax.