Research On Family Declaration System Of Personal Income Tax

After 30 years'development, the personal income tax has been the fourth largest tax of our country and it accounted for 6.78 percent of our country's total tax revenues in 2014. Over the last 30 years, the tax exemption of the personal income tax was improved from 800 yuan to 3500 yuan, the tax rate was reduced and the tax bracket was reduced. These above changes are designed to adjust the income distribution, and to narrow the income gap. The personal income tax is the most tax that can reflect tax equity principle. There are full of some changes in the process of development. The Finance Minister raised the issues for the personal income tax's reform in the third session of 12th National People's Congress. He said that if we want to solve the problem on the personal income tax fundamentally, we should not raise tax rates simply but need to reform the tax system. The calls for the personal income tax's reform are more and more higher. The Sate Council and the financial and tax departments are also doing intense preparation for the tax reform.Since levying the personal income tax, we adopted classified income tax and separate returns. When it comes to setting rates and to deducting the cost, we should declare alone. Classified income tax and separate returns do play a powerful role at the beginning of levying the personal income tax. But with the development of economy, due to the taxpayers'diversified sources of income, their main income is no longer based salary. Therefore separate returns under the classified income tax is unable to reflect the function of the personal income tax increasingly. In recent years, although the Gini Coefficient declined year by year, it's still at a high level. It is an urgent task that reduce the Gini coefficient of income and then play the role of personal income tax. Under appropriate conditions, we can consider implementing family declaration system. Family declaration system is based on the family unit. When collect the personal income tax, we should consider family factors and it will reflect taxation on capability. They are driving forces that putting forward classified comprehensive income tax system, implementing real estate registration system in 2015 and implementing unified personal income tax identification number system in "People's Republic of China revised draft Tax Administration Law (draft)". We would make a greater effort to enhance the tax authorities'level of collection, to promote taxpayers'self-compliance and to set up information sharing among departments.Since ancient times, the Chinese concept of family is so strong. Gary Becker Stanley, a famous economist, put forward that the family is the basic cell of human social life, family bear half or more than half of economic activities'responsibility in the modem market economy. Thus the family is so important in the Chinese and western ideas. Family tax declaration system has gradually improved and has a long development and change in the United States, France, Japan and other countries. The United States implement a selective family declaration system. Taxpayers can choose declare units according to oneself circumstance that include married people filing jointly (including widowed), married people declare respectively, single people declare, headed declare. If there are no exceptional circumstances, you may not change the reporting unit. The United States encourage families to declare tax in essence. French individual income tax declaration require couples must implement the joint declaration. Except under strictly limited conditions, you an not allowed to declare separately. When performing family declaration, all family incomes need to be split and need to consider all family members. Total household income is divided into a certain share and everyone shares the independent progressive income tax rates. Japan's personal income tax is separate declaration system. Ours has a very different from Japan's. Japan's separate declaration considers the factors of the family. When levying personal income tax, it takes into account the cost of aging, raising specific objects and persons with disabilities. A comprehensive standard deduction of expenses is vary depending on family size and household spending. Learn from the foreign experience, we will find family declaration that is suitable for our country.In summary, we will face some operational problems that contain how to implement family declaration, to determine the reasonable tax return subject, to determine reasonable tax return location, to Merge household income and to promote families'independent tax return and so on. This article will answer these questions one by one.There is shortage in this paper that not to consider the cost of implementation. When considering the cost, we will need further discussion.Family declaration is the direction of the future tax reform in our country. Any reform is not achieved overnight. So we need to gradually perfect in the reform of the family declaration.