A Study On The Redistribution Effect Of Personal Income Tax To Urban Household Income

The problem of income distribution brought by economic development has always been a common concern of all countries.Also,our country is no exception.When we enjoy the high-speed economic development brought by opening up,we also face the reality that income gap continues to expand.Personal income tax is prized in narrow the income distribution gap.How well does personal income tax works in adjusting income gap? What is the internal factor that affects the redistribution effect of personal income tax? How to reform the personal income tax system? In this paper,I will try to solve all these problems.On the basis of analyzing the related concepts and the income distribution mechanism of personal income tax,this paper follows the "phenomenon analysis-effect analysis-factor analysis-suggestions" ideas.The analysis of the phenomenon consists of two parts.Firstly,the paper analyzes the present situation of the income distribution of urban residents in China from three aspects: the income distribution of different income groups,the contribution of different income sources to the total income and total income gap,income status of residents in different regions.Secondly,the paper analyzes the current income situation of personal income tax from the aspects of the macro tax burden of individual income tax,the tax burden of each income class and the share of tax,the contribution of different income sources to personal income tax and income.However,how is the distribution effect of personal income tax in China? The paper will carry out the empirical analysis of the income distribution effect of personal income tax.Firstly,establish the indicators to measure the effect of personal income tax redistribution and progressive.Secondly calculate and analyze the overall redistribution effect of personal income tax.Thirdly,horizontal fairness and vertical fairness are also need be measured and analyzed.Finally,decompose the vertical fairness index into the progressive K index and the average tax rate and analyze them.Then,establish the regression model to analyze the effect of the average tax rate and progress on the redistribution effect of personal income tax.Finally,according to the relevant conclusions,put forward the corresponding recommendations on personal income tax reform.The main conclusions of this paper are as follows:First,with the development of economy,compared with low-income people,high-income people have more diversified income,easier access to operating income and property income,which make high-income people's income growth faster than low-income people,and then further widen the income gap.Wage income has the greatest contribution to the total income gap.And it progressive performance of the tax rate narrows the income gap to a certain extent.However,with the diversity of income sources,the share of wage income and the contribution to the total income gap both decreases.Meanwhile,the impact of other income on the total income gap increases.What worse,Gini coefficient of different income sources increases year by year,making the income gap increase.Second,personal income tax has the positive effect of adjusting the income gap.But compared with other countries,the ratio of personal income tax revenue in the total tax revenue is low,weakening the income distribution effect.Due to the progressive of wage income tax rate and classification of levy mode,makes the wage income become the main source of personal income tax.The contribution rate of wage income to tax revenue is rising,which is contrary to the decreasing trend of the contribution of wage income to total income.It shows that personal income tax has the risk of becoming wage tax,which is not conducive to the function of adjusting income gap.Third,it is unreasonable to reduce the tax burden of the low-income groups only by raising the exemption amount.After raising the exemption amount to a certain extent,the effect of reducing the tax burden of low-income groups is not obvious.A more scientific cost deduction approach should be established.Fourth,through the calculation of the redistribution effect of personal income tax,it is found that the effect of redistribution of personal income tax is increasing year by year,but it is still weak.Through the decomposition of the effect of personal income tax redistribution,it is found that classification of levy mode led to the horizontal unfair,making same income taxpayers tax different.Whats more,both the average tax rate and the taxation progressively play a positive role in promoting the vertical equity of personal income tax.But they show the opposite trend,and the average tax rate on the personal income tax vertical fair impact greater.Fifth,through factor analysis,it is found that the progressive and average tax rates have positive effect on the income distribution of personal income tax.In contrast,the average tax rate has a greater impact on the income distribution effect.