The Research Of Innovation Of Domestic Individual Income Tax System

Taking a worldwide view of current nations tax system, the individual income tax has played a dominant role gradually with the economic development, and became the main tax in many western developed countries. It can be taken as a barometer reflecting a country's tax system development. Since the first imposing individual income tax, its status has been increased in China's tax system. With the continuous development of socialistic market economy and the constant improvement of taxes reform, the individual income tax has played an increasingly significant role in the controlling of national macro-economy, regulating the income allocation, achieving the economic goals and etc. However, as there's only 30 years process of individual income tax practice in China, and with the short time for theory research and the various access to income source, not only the taxation become complex as well as difficult causing great loss of national tax, but also its function for regulating the income allocation is full of doubt, following with a call for individual income tax system reform. According to these, this article has such meaningful sense that it's aimed to study on how to enhance the personal income status in our country's tax system, especially to hit the goal of how to take action to minimize the income distance of different groups.This article consists of five chapters according to the author, as follows:At the beginning, chapter one describes the phenomenon about the unfairness of first-time income allocation leading to the widening gap trend in public. According to that, the author emphasis on the redistribute function of personal income tax inevitably during the process, and give out an reasonable functional definition.Chapter two briefly summarize what the system is and elaborate the diffirences between formal system and informal. In this chapter there is also analysis how to design and even innovate the system, and whether there is any possibility, which build up a theoretical foundation for the innovation of individual income tax.Chapter three introduce the individual income tax system history in China at first, including the situation at modern times, and from the individual income tax status and burden analyse its function. From the characters and various elements aspects, there is a clear analysis into details of the main problem we face to the individual income tax system, such as the low standard for tax exemption without flexibility, the complex structure of tax rate with the high marginal tax rate, the obvious unfairness for taking individuals as tax object, the low level of taxation as well as tax losses from high income individuals, and etc.The fourth part is to analyse the probable target of our country's individual income tax, and agianst above problems the author try to make research on the tax system reform pattern and solve it. The author supose as follows: firstly, to the tax system model transition we could take a family as tax object for an integrated tax model; secondly, according to tax fairness principle the tax exemption which complexed with both individual and family should be varies form different environment; thirdly, the optimization on tax rates structure under the integrated tax model by family object must consider our country's reality, for example, when the primary-earner work ability has improved to some extent, there need to increase the tax from the second-earner in order to prevent them to entry human resource market, and the opposite exist as well; last but not least, by the model for tax evasion theory, we should strengthen the administration about tax evasion, adopting such measures as reducing tax rate appropriately for higher income individuals, increasing penalty on tax evasion cases, improving tax auditors quality, and implementing tax agents system, and so on.The chapter five is conclusion part at the end.Based on the above analysis, we can draw an conclusion that nowadays there is many problems leading to large income gaps need to solve urgently in domestic individual income tax system, in order to enhance the status and function of our individual tax. In the developing countries as we are, we should pay much attention to the environment of current politic, economic, social and historical cultrual, following the natural laws of our economic and social development, considering our own national situation gradually with the involvement of worldwide countries. With our continued economic development and people's living standards improvement as well as tax structure adjustment and tax collection enhancement, there comes an inevitable developing trend for increasing our personal income tax status not only on the government revenue but also on the income allocation adjustment.