A Study On Individual Income Tax System From The Perspective Of Labor Income Gap

Income distribution is not only a hot issue that the people generally pay attention to,but also a prominent problem that the government has always attached great importance to.Since the Reform and Opening,China's economy is indeed growing rapidly and the living standards of the residents have increased significantly owing to the policy such as “Efficiency first,while considering fairness”.But the gap between rich and poor have widened at the same time.In recent years,China's Gini coefficient has been high and has exceeded the recognized international cordon which means the income gap is very large between rich and poor.Excessive income gap not only hindered the improvement of a harmonious society,but also hindered the continued growth of the economy.So,it has become particularly urgent to narrow the income gap.The report of the nineteen people's Congress pointed out that China's income gap is still large.We should fulfill the function of government redistribution regulation to narrow the gap of income distribution.As an important tool to raise the income,adjust the income distribution and narrow the income gap,the personal income tax is the fairness of the distribution of income distribution in China.How does personal income tax play a role in regulating income distribution affect the fairness of income distribution.However,personal income tax's function of income distribution is limited and it only narrowed the income gap to a certain extent.did not reach the effect due to the imperfection of China's personal income tax system and other reasons.From the "Ninth Five-Year Plan" in 1996 to the "second five" plan in 2011,We has proposed the establishment of "integrated and classified personal income tax system" in four continuous five year plan.Although the idea of a change in the tax model has been proposed for 21 years,but tax reform is still on the local fine-tuning,the long-awaited integrated and classified tax system is still not taken a substantive pace.Only by combining exemption and other tax elements such as levy mode,tax unit,deduction,tax rate,etc.and to carry out a totally reform can the goal of adjusting income distribution be achieved.So,this paper is aimed to explor the perfection of individual income tax system from the perspective of labor income gap.First of all,I have defined the income of labor and non-labor,According to the definition,salary income,labor remuneration income and royalties income is labor income,the remaining part of non-labor income.The rest of the personal income tax item is non-labor income.I found that labor income has a dominant position in national income,and the internal gap in labor income continues to increase.So i think that the internal disparity of labor income has an important impact on the expansion of income gap;Then I decomposed the income Gini coefficient by income source project and calculated the contribution rate of wage income,operating income,property income and transfer income to the national income Gini coefficient respectively.I found that wage income has the greatest contribution to the Gini coefficient of national income which further validates my preliminary judgment that the internal gap of labor income has an important influence on the expansion of income gap.So it is necessary to adjust the gap in labor income.The analysis shows that many reasons such as unreasonable initial distribution of labor income,the application of science and technology in labor and the defects of labor income tax system design together lead to the increasing gap between the internal income of labor income.Finally,I designed a personal income tax system aims at narrowing the internal gap between labor income.Under the established goals of establishing a integrated and classified personal income tax system.I suggest that part of non-labor income is still sub-levied,and implement the comprehensivetax on part of the labor income.Taxpayer is a family that earns labor income.There are four kinds of tax declaration: couples joint declaration,couples alone declaration,single parent family declaration and single personal declaration.In addition to the cost deduction,the cost can be deducted in full,the comprehensive cost deduction includes housing loan expenses,rental expenses,children's education expenditure and medical expenses,The standard deduction for the exemption is ?42,000 per year.The dependent elderly and dependent children can also be deducted according to their corresponding coefficients.The tax rate structure is five levels of progressive tax rate,While the tax rate is 5%,10%,15%,25%,35%.Improve the labor income tax system at the same time strengthen the tax collection and management,the two cooperate with the protection of the smooth progress of tax reform.The two together to jointly protect the smooth progress of tax reform.