Research On The Policy Target Of Individual Income Tax System In Our Country

Since the reform and opening up policy have implemented in China, the economyhas developed rapidly, and the economic level has been improved. Also, the incomelevel of residents has increased significantly. However, the different economicdevelopment level in different regions and different industries caused a incomedistribution gap like the gap between the people living urban or rural areas.Additionally, the gap shows a increasing trend recently, which could be a threaten to thesustainable economic development and social stability. Therefore, it cannot be ignored.The progress of personal income tax system is helpful for reducing the gap. It hasshown the benefits on a range of respects. For example safeguard the interests of thecountry, increase revenue, adjusting the income and so on. The latest revision of thePersonal Income Tax Ordinance was implemented on September1, in2011.Nevertheless, the latest revision is still not perfect in a terms of fields.This easy starts from the perspective of fairness and efficiency of individualincome tax standards evaluating the effects of individual income tax standards, andprovides possible solutions to improve the standards. It can be divided into five sections.In the first section the research background of individual income tax standards,relevant literature review and research methods were written; The second part describesthe functional positioning stage of individual income tax standards in China, and thefunctions individual income tax standards with different institutional reform wereanalyzed employing the optimal tax theory, the theory of the negative income tax, fair&single tax theory; The third part sets out from a historical perspective to analyze theunderlying policy objectives of the individual income tax standards system, includingthe utility analysis of the goals towards revenue, equity and efficiency goals, adjustingincome distribution, and relevance analysis between the personal income tax policygoals and other policy objectives; The fourth part continuing the previous section,provides the proposed ways which are improving related administration and legalenvironment to achieve those goals mentioned before; Finally, the fifth partsummarizes this study, and critically pointed out limitations and bias of the research,the implication for future researches were given.Based on research and investigate the historical development of personal incomein Western countries, combined with national conditions, this article analysis thepersonal income tax policy objectives of our country in a given period is to adjustincome distribution. Using some of the data analysis and relevant theory, put forwardthe status quo of income gap in our country at present, and proposed the utility of adjust income distribution of personal income tax has not been fully exploited. On thebasis of the relevant experience of other countries for reference, put forward somereform suggestions, and put forward to set a tax adjustment system which priority towith individual income tax as well as inheritance tax and social security tax iscomplementary, prompted individual income tax can play a maximum effectiveness.