A Research And Analysis About The Selection Of China's Individual Income Tax Unit

Personal income tax is a direct tax derived from natural persons' all types of income.The Personal Income Tax Law in China came along in 1980,after that several important amendments were carried out.At present,personal income tax plays a huge role in some aspects,such as increasing the fiscal revenue,promoting the economic and social stability.However,it wasn't effective in adjusting the social income gap and maintaining the social equity,because the tax unit of our country's personal income tax is individual.Under such a tax system,both the differences in families' economic burden and the tax-bearing capacity of different taxpayers are not considered,which leads to a deviation from the goals that the personal income tax should adjust the income of citizens and realize the fair distribution.In this paper,some reflects and outlooks of the tax unit in our country are put forward,based on China's national conditions and overseas experience.In this paper,a contrastive analysis about different tax units – individual-based or family-based – is firstly elaborated,including their concepts,connotations,advantages,disadvantages and implementation conditions.Secondly,there is an analysis about the relation between the two tax units and the goal of our country's “classification and comprehensive” reform.From this,we can draw the conclusion that family-based taxing is suitable for the reform goal of our country's tax system.What's more,the feasibility,difficulties and obstacles of that are also discussed in this part.Thirdly,as for the difficulties and obstacles,we could learn from the United States and Japan to finalize the principles and methods on how to determine the tax unit of our country.We can also get some inspirations as well.By combining the theories with practices,and analyzing some cases,we could conclude that levying personal income tax in family is more suitable for the principle “taxing in fair,taxing by capacity”.Finally,based on the conditions of our country,some ideas about the family-based taxing reform are presented.