The Research Of China’s Individual Income Tax Model

The classified income tax system has been used for decades sinceChina’s individual income tax was levied. It was feasible in the early periodof China’s individual income tax. With the development of China’seconomic, the phenomenon of uneven distribution of income and wealthdifferentiation is increasing. The classified income tax system has beenunable to meet the real needs and has caused many problems. The reform ofChina’s individual income tax model is imperative.On the levels of theoretical and practical, this paper analyses andcompares the pros and cons of the three models of the individual income tax.And then, on thinking the national situation, the paper points out that thecomprehensive income tax system is not only necessary but also practicable, and we should as soon as possible take the comprehensive income taxmodel.In this article, there are five parts, which focus on the main questions inthe reform of China’s individual income tax system:The first part systematically describes the classification of individualincome tax model, points out the principles of the selection on the models,and also analyses the development trends of individual income tax model.The second part introduces the backgrounds of the reform of China’sindividual income tax, especially the unfair tax burden and a great loss oftax revenue caused by the classified income tax system, which means thatChina’s classified income tax system needs to be reformed.On the view of theory, the third part analyses the two basic principlesof tax law, which is the principles of fairness and efficiency. By analyzingthe actual situation in today’s China, we conclude a best choice of theindividual income tax system, that’s the comprehensive income tax system.The fourth part, the paper once again returns to our current economicand social reality. It analyses some favorable conditions, and also givessome matching conditions in the shifting of the individual income taxsystem.The last part is a summary of the text, which provides a suggestion that is the comprehensive income tax system should be taken as quickly aspossible.