Study On The Redistribution Efflcect Of Individual Income Tax

Income gap has become a thorny problem in front of China's current social and economic development,according to the data from national bureau of statistics,China's Gini coefficient has exceeded in the past decade and entered the higher unreasonable income distribution range.The development experience of human history tells us that the excessive income gap will not only affect the economic development process,but also aggravate social contradictions and affect social stability.As an important policy tool of adjusting income distribution,individual income tax plays an important role in the adjustment of income redistribution.The eighteenth national congress of the communist party of China has confirmed the overall direction of the next round of income distribution reform,and also laid down the overall principles and objectives of the future reform of China's individual income tax.Study on the redistribution effect of individual income tax is of special significance to current and future economic development.The government uses individual income tax to adjust the result of initial income distribution,which is an important policy measure that compensates market failure,perfects market economy system.The individual income tax has a substantial impact on the disposable income of households,and the mechanism of equitable income distribution affects the transformation of social consumption level and economic growth mode.At the same time,personal income tax reform is an important measure to build a new type of government and market relations,establish a service-oriented government,and promote the modernization of national governance system and governance capacity.Above all we need have a profound insight and understanding to formation mechanism of the individual income tax redistribution effect and principle,so in this paper,the individual income tax redistribution effect of study has both theoretical value and practical significance.The first part of this paper introduces research background and significance of thesis,current research status at home and abroad,research methods and routes.The second part briefly introduces the structural characteristics of China's current redistribution system and the orientation of individual income tax,at the same time makes a brief analysis of the tax elements that affect the redistribution effect of individual income tax.The third part mainly introduces the data sources used in the empirical analysis and the theoretical significance and calculation methods of various indicators.The fourth part is the empirical analysis of this article,this part uses the data of CHIPS,Combined with Gini coefficient and its derivative redistribution effect index(MT index)to display the redistribution effect of individual income tax,which distinguishes redistribution effect between wages tax and gross income tax,and then examines tax burden distribution and redistribution effect from household income structure aspect and the aspect of different income groups(five group sorted by family per capita income level).The correlation between the average tax rate and the progressive sex is briefly described through international comparison.The fifth part is based on the fourth part,and the reasons of the current income tax redistribution effect in China are briefly discussed from the perspective of progressive and average tax rate.The sixth part,based on above analysis results,gives the research conclusions and policy recommendations.The results show that,in 2002,2007 and 2013,China's individual income tax played a positive redistribution effect,but the redistribution effect was very limited.The redistributive effect and the average tax rate rise first and then decline in three years,and the progressivity declines first and then rises.Compared with OECD countries,the main reason for the smaller redistribution effect in China is that the average tax rate is too low,and the progressive is at a high level compared with the OECD countries.Research on five different income groups of the grouped data show that each year the average tax rate and tax burden is progressive,but the structure change obviously,the tax contribution of low-income and middle-income groups is increasing,and the tax contribution of high-income groups is decreasing gradually.The proportion of salary income in the total revenue has been on the decline,property income and business income accounted for the overall rise gradually,but their tax contributions are in decline,income contribution and tax contribution are serious unequivalent.Based on above research conclusions,author put forward the following proposals for individual income tax reform:in view of the tax base,further broaden the definition scope of the tax base,The current positive enumerated tax base definition mode should be transformed into a negative list which forms of income are not taxed,blocking tax loss caused by the delay of the tax law,make tax base definition and income diversification trend synchronous and strengthen the flexibility of tax base definition.In view of tax system model,the current classified income tax system for individuals should be gradually turned into integrated income tax system for households,in the reform transition period we should gradually increase the comprehensive level of income,In particular,the income of the labor nature will be consolidated,on the basis of the income of business income and property income,it is necessary to set up a more progressive tax rate structure,thus increasing the contribution rate of non-wage income to the overall redistribution effect.In view of the system of expense deduction,while ensuring the existing exemption and three insurances deduction,take the taxpayer's family burden(including but not limited to supporting the elderly,raising children,housing loan expenditures,education expenditures,medical expenses,etc)into the expense deduction scope,and form the cost deduction system which is combined with the deduction of basic expenses and certain expenses,and enhance the flexibility and pertinence of the deduction of expenses.But all improvement measures above depend on the perfect collection condition and strong ability of tax collection and administration.Thus,establish the sharing mechanism of taxpayer income and property information among government departments and master the related tax information of taxpayers will be an important task of tax reform in the future.