Redistribution Effect Of Personal Income Tax Reform In China

In the past two years,Personal Income Tax reform has become the focus of public discussion once again.The reason is not only that the Personal Income Tax is a direct tax,but also that it regulates the important functions of income distribution.With the rapidly growth of China's GDP,the residents' income has increased year by year,while the income gap between the high and low income groups has been widened,and the progress of Personal Income Tax is conducive to the realization of the redistribution of income,which contribute to narrow the income gap.To promote social equity,the study of Personal Income Tax progress and income redistribution effects have great significance in the future reform.By analyzing the reform process of Personal Income Tax in China,we can find two problems.Firstly,the reform is mainly focus on the exemption and tax rate structure,which are the basic tax factors affecting the progressive nature.The level of income gap caused by the level of economic development and residence income,can be adjusted by these two factors.Secondly,based on the current tax collection and management mode,the proceeds of income control is not enough except wage income,which makes the actual income of individual income tax redistribution effect and the theory effect does not match,thus greatly reducing the the adjustment of income distribution of Personal Income Tax.The discovery of these problems and how to use tax data,quantitative analysis and evaluation of the previous reform of the income redistribution effect,has become the focus of academic and tax policy makers.Based on the policy background of China's Personal Income Tax reform in 2006,2008 and 2011,this paper uses the micro-data and micro-simulation analysis method of CHNS sampling survey to analyze the effect of tax redistribution on 2006,2008 and 2011.This paper analyzes the income redistribution effect of different income groups and different regions in China from the perspective of panel data of residents'income and Personal Income Tax from 2005 to 2014,and explores the effect of Personal Income Tax reform on income redistribution effects.The results show 3 points.Firstly,the effect of Personal Income Tax reform on income distribution is quite different among 2006,2008 and 2011.Through the decomposition of MT index,it can be concluded that the income redistribution effect of tax reform is strongest in 2008 and weakest in 2006.Secondly,the third reforms are aimed at wages,which are used to adjust the cost deduction standard and tax rate structure.Through the factor analysis,it can be concluded that both reform measures can reduce the tax burden and promote the fairness of income,but the cost deduction standard has a greater contribution than the adjustment of tax rate structure to the redistribution effect of personal income tax.Thirdly,the reform of Personal Income Tax system can make the income inequality level decrease to a certain extent,but there are differences in the effect of different areas that the income redistribution effect in the economically developed areas and the areas with high income gap is stronger,but weaker in economically underdeveloped areas with low income levels.Based on the empirical results of the micro-simulation model,this paper proposes to establish and perfect the taxation model combined with the classification and synthesis,which should be based on the design of the deduction amount,the optimization of the tax rate structure,the key collection and management of the high-income groups and the subsidy to the disadvantaged groups As well as the design and the level of regional development to adapt to the "flexible" tax system and other four aspects of the individual income tax system for further reform provides a reference and feasibility recommendations.The innovation of this paper is to use the micro-data and micro-simulation model to study the income redistribution effect of personal income tax reform,and to analyze the income redistribution effect of personal income tax reform.Also the CHNS sampling survey data adopted in this paper,stratified cluster random sampling,which has overcome the defects of traditional family sampling average estimate.