Analysis Of The Effect Of Income Tax Expenses

Since 1967, Stanley S. Sarry, the assistant to the Minister of Ministry of Finance of USA raised the conception of tax expenditure in the first, it has drawn the attention of the world and progressed academically and practically. China is familiar with tax expenditure as the development of reformation and economy. Tax expenditure, is not only an indirect finance expenditure, but also an important method for government to reach its public policy objectives. The development of tax expenditure in theory and in practice will definitely-push China finance and taxation reform and economy reform forward, and bring good effect to China economy.The tax burden and tax income of income tax cannot transfer easily. Considering this kind of peculiarity of income tax, and the practice of other countries, this thesis researches the tax expenditure of income tax and lays emphasis on its effectiveness analysis. After the analysis on the practices of some representative countries, it gives some reformation suggestions on income tax expenditure of China.The thesis consists of five parts:The first part is the introduction of the basic theory of tax expenditure, including its emergence and development, its differences between tax preference and common financial expenditure, and its category according to different standards.The second part and the third part is the effectiveness analysis of income tax expenditure, and mainly the economic effectiveness analysis. In the second part, the mathematics model is being introduced to calculate the cost, benefit, and discount rate of the tax expenditure. In the third part, the self-compensation effectiveness, structure adjustment effectiveness and social equity effectiveness of income tax expenditure are being interpreted separately.The last two parts discusses the practice of the income tax expenditure. The fourth part introduces the exercises of tax expenditure of the representative countriesand of China, and primarily summarizes the characteristics and managerial experiences of tax expenditure of the developed countries, such as the Great Britain and the U.S.A, which have comparatively better management systems. Then it takes a retrospect of the development of tax expenditure in China since 1949, and points out its status and problems. Basing on the effectiveness analysis and using for the preference of the advanced experiences of foreign countries, the fifth part makes some suggestions for the reform and perfectiveness of China's income tax expenditure, which includes the suggestions for the optimizations of the forms and scopes of income tax expenditure.