Research On Personal Income Tax Expense Deduction System

Personal income tax levying tax from the taxpayer’s income directly, is closely related to the interests of the individual. It has played a positive role in raising fiscal revenue and adjusting income. With the development of economy, the income of residents increased dramatically, but uneven distribution of income and social gap between rich and poor widening phenomenon also intensified, so the voice of all sectors of society requiring personal income tax reform rise. In 2011 country once again raised the expense deduction standard of wages and salaries, from the original 2000 yuan to 3500 yuan now. As one of the important factor of personal income tax system, expense deduction standard not only affects the size of the tax burden on taxpayers, but also is directly related to the the concept of tax treatment to implement and influences the taxpayer’s evaluation and compliance in the tax system.Based on this, on the basis of the legal basis of the personal income tax expense deduction, and in reference to the successful practices of the main countries, this article designs a set of system program.Specific process is:First of all, according to the third plenary session of the eighteenth through the "decision", establishing classification and comprehensive personal income tax. According to the nature of income, the taxpayer’s income is divided into comprehensive income and classification income. Continuity and regular income is divided into comprehensive income and property and the non-recurring income is divided into classification income. Secondly, establishing the expense deduction process. Thirdly, respectively calculating the standard of the cost, living expense and special expense deduction.The innovation of this paper is mainly reflected on the theory and system design of personal income tax expense deduction. First, from the aspect of theory, clarifying the legal foundation of personal income tax expense deduction; Second, design a set of effective system of personal income tax expense deduction, providing a good reference for the improvement of the system of expense deduction. In addition, introducing the extended linear expenditure model (ELES) to calculate the cost of living expense standard and achieving the original intention of this paper.