China's Individual Income Tax Exemption Policy And Institutional Analysis

1.The purpose and significance of this thesisIn the heated discussion about Individual Income Tax's reform, exemption becomes the focus that various circles of the society pay close attention to. From theorists to the social public, they have their own views about the issue. Though opinions vary, all call for the demand to improve exemption of Individual Income Tax. Why dose exemption of Individual Income Tax become the point at issue? What does its amount depend on? How important is the adjustment of exemption of Individual Income Tax on earth? These lines of questions have caused the author to think. Through careful consideration after consulting a large amount of materials, the author has formed her own standpoint gradually. The author thinks that exemption is not merely a monetary amount. It includes multiple factors, such as exemption policy and exemption system. The determination of its amount has its objectivity. According to the structure of resident's expenses and the change of its scale at present in our country, improvement of its amount can not only promote progressive degree of Individual Income Tax but also improve resident's living standard. Though the related authorities expressed clearly that they would maintain exemption of Individual Income Tax to current situation temporarily at the beginning of last year because of the stability of tax system or such kind of factors, the author still thinks in the long term, the adjustment of exemption will be a trend of Individual Income Tax's reform.2.The basic train of thought and logic structure of this thesisExemption policy is the general guiding ideology; Exemptionsystem is the carrier of the policy; Concrete amount is the final outcome of exemption, determined by the exemption policy and exemption system. So long as the exemption policy and exemption system is fixed, this amount is set. Therefore this thesis mainly analyzes exemption policy and exemption system. Through international and historical comparison, accompanied by the concrete national conditions of our country, this thesis analyzes exemption policy and exemption system, and gives the general picture of the reform, which includes the adjustment of the amount.3.The main contents and views of this thesisBesides the preface, this thesis is divided into four chapters.Chapter one introduces briefly exemption of Individual Income Tax and puts forward the object of study clearly.Chapter two analyzes exemption policy and exemption system in developed countries. Taking U.S.A as an example, it analyzes the characteristics of exemption system in that country, which we can draw lessons from.Chapter three introduces exemption policy and exemption system of our country. This part analyzes the characteristics of exemption system, too.Chapter four, as the focal point of this thesis, analyzes the problems in exemption policy and exemption system. It also proposes the tentative ideas about the reform as well.The representative and innovative major points go as follows:①The definition of exemptionThere are two kinds of expense deduction: deduction of commodity and deduction of exemption. But Individual Income Tax system of our country has no clear division between those two kinds. Though the method of expense deduction is relatively easy, it seems not scientific and reasonable. The definition of exemption seems very important.②Workforce's value theory is the direct theoretical foundation of exemptionWorkforce's value is not merely the theoretical foundation of exemption but also offers quantitative limits. It determines the primary goal of exemption policy is to maintain the production and reproduction of the workforce.③The progression of exemptionThe thesis shows the progression of exemption by formulas and charts. The marginal tax rate at present in our country is too high. If we want to promote progression and do not cause the taxpayer's disgust as well, it is a good plan to improve exemption. ④The function of Individual Income...