A Study On The Expense Deduction System Of Individual Income Tax In China

The personal income tax is to the individual as a tax levy object, a wide range, coveringa wide, but also with the people closely related to the interests of the tax. The world’s levyingpersonal income tax has200years of history, after all the efforts to correct and drawing onexperience, the personal income tax to achieve fiscal revenue and adjusting income taxdevelopment history is short, but very quickly. Because of this, the individual income tax ofour country in the development process of all kinds of contradictions, especially the personalincome tax expense deduction system. In today’s prices soaring, the expense deductionstandard and no CPI, resulting in reduced per capita disposable income of residents. At thesame time, expense deduction system design unreasonable cause social gap between the richand the poor, tax inequities. There is an urgent need for personal income tax expensededuction system reform.Becouse personal income tax has the dual function of fiscal revenue and adjustingincome distraction, so a tax is widely used all over the world. At the same time, as the directinterest it closely related with people, all in accordance with own economic situationcontinued to be revised. Among them, the expense deduction system has a direct impact onthe tax base and the tax burden level, but also the key factors influencing the tax fair.China’s personal income tax has been established since1980, the increase in fiscalrevenue and adjusting income distribution has played a positive role and has become the fifthlargest category of tax system in our country. However, with China’s economic developmentlevel to rise, in the social gap between rich and poor is widening and the price level rises. Inthe current expense deduction system, the fair principle of taxation is not in accordance withthe individual income tax and did’t play personal income tax function. And the personalincome tax law reform among the heavy is the expense deduction system. Developing aflexible expense deduction standard not only is conductive to the taxpayer, but also canimprove the personal income tax system, the personal income tax is to the people and for thepeople.Many Chinese scholars on the personal income tax expense deduction system reform hasdifferent attitudes. Through comprehensive analysis, it has the following four aspects: tax expense deduction standard whether the area difference and other expense deduction standardwhether to cancel, to forgive what factors the expense deduction project. This paper alsosummarized perspective study on the line by foreign scholars on the expense deductionsystem.The necessity to the net and the principle of equity and efficiency as the theoreticalfoundation to illustrate the state personal income tax deduction system in the thesis.Combined with China’s present situation and personal expenses deducted data system, thenaccording to the America and Japanese personal income tax expense deduction system ofsuccessful experience, combined with China’s actual situation and using the least squaresmethod model of Eviews per capita disposable income and consumption expenditure toestablish the regression equation, and then predict the deduction standard six years of personalincome tax in our country in the future.This paper is the method of quantitative analysis, supplement by qualitative analysis ofresearch methods to find the personal income tax expense deduction analysis system defectsand solve problems. Quantitative analysis method is used in this paper as follows: First,through the analysis of urban residents each employment burden number of interpretation oftax unreasonable problem with individual:Second, the use of China’s urban residents percapita consumption expenditure structure of China’s personal income tax to parse withdeductions are not completely; Third, the average monthly wage China’s urban residents,investigation and comparison on different expense deduction standard pay taxes to illustrateour expense deduction standard design is not science; Fourth, combined with urban residentsin different regions of China in2011, consumer spending data to explain our country expensededuction problem consistent method area. The qualitative analysis is mainly from theAmerica, Japanese deduction system experience. Through the analysis of our country taxexpense deduction system problems and experience, then puts forward six suggestionsabout the six points of the reform of China’s personal income tax expense deduction system.First of all, the per capita disposable income consumption expenditure of the Eviews model,and predicts the deduction standard six years of personal income tax expense of our future;Second, we should learn from the successful experience of the America, tax indexation; Again,expanding the scope of project expense deduction system, especially the livelihood deduction; In addition, the expense deduction standard implement regressive ratio system. There isintroduced to the family as the payment unit; Finally, the abolition of the other payrollexpense deduction standard.