The Research Of Improving Individual Income Tax To Adjust The Gap Between Rich And Poor In China

The problem of the gap of rich and poor is an old but an urgent topic in China.The factors of why there is a gap are manifold, but the imbalance of incomedistribution is the most important factor. As an important lever to adjust incomedistribution, Individual income tax plays an important role to narrow the gapbetween rich and poor in China. In recent years, the Chinese government hasrepeatedly done important reform on individual income tax. Especially, theadjustment of income tax threshold and the progressive level, in the year2011, is amilestone in the individual income tax reform history. In this situation, it has notonly important theoretical significance but also important practical significance, toresearch how to improve the individual income tax.How is to improve the individual income tax in order to adjust the gap betweenrich and poor in China better, but to ensure fair and equitable and the tax efficiencycan be improved. Around this issue, Chinese scholars have conducted extensiveresearch from different perspective on how to improve the individual income tax.Firstly, this paper summarized the research results, and it is hoped to be inspired.This paper introduces the history of the individual income tax reform, and comparesthe individual income tax model in china with the world’s developed countriesindividual income tax model. It does provide important practical basis to discuss thechanges in direction of China’s individual income tax. This paper also uses a largeamount of data to describe the current situation of China’s income distribution,coming to the conclusion: the income gap between the industry is too large,inter-regional income gap is too large, urban-rural income gap is too large. Inaddition, this paper summarizes the reason to produce the income distribution gapfrom two aspects: the theory and the reality.This paper analyses a series of questions of individual income tax system fromthe negative impact from the current individual income tax, rates and fees deduction. Based on the research results of domestic scholars and foreign successful experience,this paper gives suggestions on how to improve our individual income tax system.For tax model selection, the tax must be both fair and efficient. Based on thesimplified taxation system, broad tax base, low tax rates and stricter tax collection,we must select the comprehensive income tax system mode, and make it a gradualtransition to the consolidated income tax model in order to eliminate the amount ofnegative impact brought by the individual income tax. For the rate design, we mustmaintain a progressive tax rate and a proportion tax rate in parallel. At the same time,the industry should become the limit of the differential marginal tax rates in order toeliminate unfair tax rates on different amounts of income groups and income groupsof the different ways. For expense deduction, we must set the concession varyamong people, and use tax indexation in the tax system in order to eliminate theimpact of inflation on individual income.